Alibaba’s CEO to Hold Chairmanship at Intime Retail Group

Published By : 21 May 2015 | Published By : QYRESEARCH

Mr. Daniel Zhang, who was appointed as the CEO of Alibaba Group in the early May, is going to become the new chairman of Intime.

Rumors about Alibaba injecting more internet components into Intime has raised stock price of the retailer in no time. Shares of Intime raised 20% on Monday after the firm announced the appointment of the chairman. But the rally quickly petered out, having shares dropping around 3% the next day and then collected up 0.3% to finish at US$1.92 on Wednesday.

From a valuation perspective, the investors should take some capital off the table after the recent most rallies in Intime shares prices albeit the fundamentals of the retailer remain intact, as stated in a report dated May 19, 2015. The Japanese brokerage house demoted Intime from neutral to reduce and then suggested the investors to switch to the Golden Eagle that it believes has a potential upside of almost 10%.

The report prepared by Ms. Katherine Chan stated that they utilize SOTP to derive their target price of US$1.78 using 2016F EPS. Their change in methodology reflects the approach taken by A-share investors, the report said. They believe that this valuation seems full, provided a target price of US$1.78 based on a projected price-to-earnings ratio of 2016 of 30 times. Both Alibaba and Intime are still at the same stage of the learning process for the online-to-offline business, the report said.

According to the guidance of Intime, the revenue from the O2O business of the firm will represent around 20% of its overall sale, up from an estimated 6% in the year 2015. The projection from the firm indicates the revenue and earnings are developing at a CAGR of 40% to 70%during the period from 2016 to 2018, which appears slightly aggressive, stated the report.
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