13. October 2021 | 11:09 CET
Alibaba, AdTiger, ProSiebenSat.1 Media - Christmas business makes the cash register ring in the advertising market
Even before Corona, more and more people were shopping online, and the pandemic has further boosted this trend. Christmas is fast approaching, and this festival of gifts traditionally brings retailers the highest sales. Sitecore has learned from a survey that Christmas shopping will start earlier this year. When talking to local retailers, it is often heard that customers are nowhere near as abundant as they were before the pandemic. Corona rules or mask-wearing obviously bothers some consumers, and so they continue to turn to online shopping. The advertising market will grow significantly in the next two months, both online and offline. So today, we analyze three companies that are involved in advertising and e-commerce.
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ISIN: ALIBABA GR.HLDG SP.ADR 8 | US01609W1027 , ADTIGER CORP.LTD. | KYG009701064 , PROSIEBENSAT.1 NA O.N. | DE000PSM7770
Alibaba - Charlie Munger buys in
The Chinese government has repeatedly put a spoke in the wheel of its tech companies. When the vice chairman of China's Internet regulator announced further steps to rein in its tech companies, even more, one might have thought that Alibaba would continue its dive that took the stock as low as USD 138.93. But since October 5, things have been on the upswing. Is it just because a lot of bad things have already been priced in?
The answer is a resounding no. On October 5, it was announced that the Daily Journal Corporation increased its Alibaba position by 82% since July. The Company is owned by Charlie Munger, Warren Buffet's partner in crime. Since then, the stock has been climbing. Additionally, the share has been hotly discussed on Reddit's WallStreetBets. Furthermore, the Company was able to present its best results in years in the fourth quarter.
Alibaba is at home in e-commerce. It generates much of its revenue from its marketplace and advertising placed on it. The stock has made a multi-year low, but China will become the largest economic power in the long run, and already the middle class is growing rapidly. Will the old highs of over USD 319 be reached quickly? Probably not, but a rebound is more than overdue. After all, the Company is making a lot of money.
AdTiger - Making investments
AdTiger is a marketing specialist listed on the Hong Kong Exchange. The Company offers its clients a performance guarantee. As a certified marketing partner of companies like Google, Facebook, Instagram and Co., customers benefit from years of cooperation with the big players. The Company passes on some negotiated discounts to its customers, thus ensuring that they spend less money than before.
With AdTensor, the Company offers online advertising services based on Big Data and Artificial Intelligence. The AI checks in real-time how to generate the greatest reach in the most cost-effective way. Again, the customer saves in the end. To stay ahead in the AI space, subsidiary AdTiger Technology has invested 20 million renminbi (RMB) as a limited partner in an innovation fund that supports emerging industries such as 5G, quantum communications, and edge computing.
The Company is debt-free, throwing off profits, and as announced on October 11, it is investing RMB 16.5 million with the Bank of Hangzhou, earning about 3.126% interest. The one-time costs of setting up a site in China have been paid. One can probably profit from the Christmas business in the fourth quarter. In the first half of the year, sales increased by more than 16% on a year-on-year basis. The share is currently favorably valued, as it was dragged down in the wake of all Internet companies.
ProSiebenSat.1 Media - Subsidiary to go public
There have been takeover rumors at ProSiebenSat.1 Media for some time. So far, however, there is no reliable information. From an investment event, one heard of excellent advertising revenues. These promising figures should also be confirmed in the fourth quarter. The media company has been working to make itself less dependent on these advertising revenues by investing in Internet holdings and advertising them on TV. A dovetailing of Internet and TV is to be driven forward in the long term.
Recently, the stake in erotic retailer Amorelie was sold. Shortly afterward, The Meet Group was acquired at the beginning of September, as was the LOVOO dating platform. The aim is to become the leading provider in the online dating market. The dating division is to be floated on the stock market in 2022, which could significantly increase the valuation of ProSiebenSat.1. Investors should keep November 4 in mind. The group plans to present its figures for the third quarter, which could come as a positive surprise.
Sat.1 will show a concert by Helene Fischer in November and has been able to enlist veteran Stefan Raab as musical director. Advertising revenues are sure to be high that evening. Pro7 is rumored to repeat the concert a few days later. The stock needs impetus at the moment. Since the end of July, the share has been running sideways between EUR 15 and EUR 17. Below EUR 14.82, the downward trend remains intact. Above EUR 17.02, the downward trend is broken, and the share price would again trade above the 200-day moving average.
All three companies had their biggest sales in the fourth quarter in recent years. Alibaba seems to have been kissed awake by Charlie Munger. AdTiger is using its cash holdings to invest and, like Alibaba, is fundamentally cheaply valued. ProSiebenSat.1 Media currently has good advertising revenues from TV. The share needs impetus in the form of positive news.