The Strategist

S&P confirms Alibaba's rating at A+ with stable outlook


12/16/2019 - 08:40



The international rating agency S&P Global Ratings confirmed the issuer rating of the Chinese Internet company Alibaba Group at "A +", the rating outlook is stable, the agency said in a release.



hinglish Notes via flickr
hinglish Notes via flickr
"We confirmed Alibaba's rating because we expect the company to remain dominant in China's large and growing e-commerce market. In addition, streamlining the company's costs should stop the recent bearish pressure on its profitability," the report said.

The agency expects Alibaba's profitability to stabilize over the next 24 months thanks to the company's efforts to improve operational efficiency. At the same time, Alibaba's ratings will continue to be limited by China's sovereign rating, given that the company receives more than 90% of its revenue domestically.

"We can downgrade the company if Alibaba's debt to EBITDA ratio exceeds 1.5x. The likelihood of Alibaba's rating upgrade over the next 12-24 months is low because the company’s rating is at the level of sovereign rating," the agency said.

Alibaba Group is the largest Internet company in China, operates in the field of e-commerce. It was founded by Jack Ma in 1999. The group owns several subsidiaries and Internet sites - Alibaba Pictures, Alibaba.com, AliExpress.com, Taobao.com, Tmall.com.

source: reuters.com




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