12. February 2021 | 13:41 CET
Baidu, wallstreet:online, Alibaba: New Business, Great Potential
When companies move into new business areas, it quickly justifies a revaluation. The better the new activities complement the existing business, the greater the share price potential. A quick check of three stocks that could soon be valued very differently: Baidu, wallstreet:online and Alibaba.
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ISIN: DE000A2GS609 , US0567521085 , US01609W1027
Baidu, with a smart move
Baidu originally started like Google - as a search engine. But like Google, Baidu kept looking for new areas of employment in recent years. Most recently, the Company announced its intention to develop electric cars together with Chinese carmaker Geely. Baidu will primarily supply the software for this. The fantasy is aimed at autonomous driving. Here, Baidu could score points with its expertise. As the Japanese analysts at Mizuho Securities write, the autonomous driving division could double its valuation from USD 20 billion to USD 40 billion. The reason: Arguably, there are plans in China to expand public transportation to include autonomous driving shuttles.
Taking the idea further, Baidu's collaboration with Geely could be just in time to set foot in the booming market for electric mobility. Since software functions independently of specific models and drive technologies, Baidu is hardly taking any risks and could gain a technological advantage in addition to the prospect of lucrative orders. On the stock market, this prospect has already been met with willing buyers. Baidu's stock has gained about 20% in five days. Following the rally of other stocks around new mobility concepts, Baidu could be a latecomer.
wallstreet:online: New CEO expected to accelerate growth further
wallstreet:online was also a latecomer more than a year ago with its Smartbroker - but then the Company started to jump. Partly due to the pandemic, customer numbers climbed to 80,000 in the first year of Smartbroker's existence - competitor flatex needed a full 4 years for this development. As wallstreet:online estimates today, these numbers could more than double in 2021. The reason: The Company announced on Friday to have signed with Matthias Hach, a proven brokerage expert. Industry insiders are familiar with the name. Hach, in the past, built up the brokerages of E-Trade Germany, ViTrade and flatex. The brokerage expert only got on board at comdirect bank at a later stage but then significantly boosted customer growth during his time there.
In addition to Hach's more than thirty years of experience, wallstreet:online chose the renowned manager in particular because of his focus on user interface and customer care topics. "We are very pleased to have gained Matthias Hach, one of the most accomplished experts in the German digital banking and brokerage scene. In recent years, he has not only made a decisive contribution to the strong growth at one of Germany's market leaders but has, in particular, driven the digital expansion of the product offering. Especially when it comes to mobile brokerage & banking, his expertise will be invaluable to us," said wallstreet:online founder and supervisory board chairman André Kolbinger.
According to reports from the Company, Hach is to drive forward new features for customers immediately after taking up his post in March. While wallstreet:online is already one of Germany's best providers in terms of conditions and reliability, the broker lacks an app. It is now to be launched in 2021 and thus provide additional impetus for growth. With an app and the waiver of trading requirements for speculative values, Smartbroker wants to score extra points and challenge neo-brokers for customers. A few days ago, the Group of companies around wallstreet:online and wallstreet:online Capital already announced that it now manages more than EUR 5 billion in customer funds. In addition to broker customers' deposits, this also includes securities accounts of Volkswagen Bank, which wallstreet:online has been managing since the end of 2020, as well as deposits of FondsDISCOUNT, another brand of the Group. With its new CEO, Matthias Hach, wallstreet:online is likely to pursue its growth path even more consistently. The share recently reached a new all-time high.
Alibaba: Back on track
When it comes to new business areas, one cannot leave out Alibaba. We remember: Asia's Amazon wanted to take its fintech subsidiary Ant Group public last fall. But the Company's omnipotent appearance and some critical statements by founder Jack Ma enraged the powers that be in Beijing. Ant Group's IPO was postponed. Since the IPO was to be the largest in the world, the directive from Beijing shook not only Alibaba. Even the Chinese stock market was viewed more critically again by observers. But in the meantime, things have changed. Ant Group is negotiating with Chinese regulators about a realignment, the prerequisite for the IPO to go ahead after all.
For Alibaba, such an IPO would be a windfall. Such a transaction would also prove there is no lasting discord between the Company and the central government. The stock has already gained in recent weeks and looks promising in the long term. In German trading, the share could gain new momentum towards an all-time high beyond the EUR 234 mark.