Benzinga | Dec 20, 2021 09:19AM EST

Alibaba's Carbon Goals Could Add To Its Valuation: All You Need To Know

Alibaba Group Holding Ltd's (NYSE:BABA) carbon-neutrality goals for 2030 and beyond could bolster shareholder returns, Reuters reports.

* Alibaba's executive restructuring failed to present a compelling financial case for Alibaba amid regulatory crackdowns, China's sputtering economy, and intensifying competition.

* A near-50% plunge this year leaves Alibaba's stock trading at less than 15x 2022E adjusted earnings for its core e-commerce business, per JPMorgan estimates. That's well below JD.com Inc's (NASDAQ: JD) 33x and trails American retailers like Walmart Inc (NYSE: WMT) and Target Corp (NYSE: TGT).

* Alibaba's beat-up valuation implies shareholders ascribe zero worth to other units, including Alibaba's international operations and a fast-growing cloud-computing division, which together constitute a fifth of annual revenue.

* By 2030, Alibaba wants to achieve carbon neutrality in its operations and energy use. Moreover, Alibaba is pushing an ambitious program to reduce greenhouse gases.

* Alibaba aims to reduce 1.5 gigatons of these by 2035 by focusing on encouraging greener consumer and corporate habits, like buying eco-friendly products and using less packaging.

* Apart from the most sought-after political points, Alibaba's green pivot may even give its valuation a boost over time.

* A recent study analyzing over 1,000 companies over five years found positive correlations between ESG know-how and a firm's financial and stock performance.

* Price Action: BABA shares traded lower by 2.70% at $118.80 in the premarket session on the last check Monday.