Market News

Alipay Blocks New Users Access to DiDi’s Micro Software – Report

Alibaba’s (BABA) mobile and online payment platform Alipay is the latest to hit ride-hailing service provider DiDi (DIDI) a big blow. Citing undisclosed sources, Reuters reports that the payment app will no longer offer light-version software of DiDi’s app to new users.

The Alibaba App joins Tencent’s (TCEHY) WeChat, which has also suspended DiDi’s light-version software to new users. However, the DiDi service will still be available to users who already use them on the two platforms. The suspension only affects new users. (See Alibaba stock charts on TipRanks)

DiDi is under immense regulatory pressure in China. Authorities in the country have ordered app stores to delist its app and stop new users from registering. According to Chinese regulators, the ride-hailing services company is the subject of claims of illegally collecting user data, reports Reuters.

Yesterday, UBS analyst Jerry Liu reiterated a Buy rating on Alibaba stock. The analyst has a $280 price target on the stock, implying 34.62% upside potential to current levels. Liu is projecting a slow but steady improvement in the stock as EBITDA turns positive.

Liu stated, “Alibaba is investing heavily in groceries and lower-tier cities, and we should see some traction—such as community group buy coverage and then orders—in the next couple of quarters. By F3Q22 (Dec Q), we should see YoY EBITA growth turn from negative to positive. And next year, we hope to see improvements in cloud growth and some clarity in Ant’s business model.”

Consensus among analysts is a Strong Buy based on 24 Buys and 1 Hold. The average Alibaba price target of $298.33 implies 43.43% upside potential to current levels.

BABA scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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