On Friday local time, US stock Amazon recorded the largest one-day increase since 2015. As of the close, US stock Amazon closed up 13.54%. Meanwhile, the market value of US stock Amazon increased by US $191 billion, or about RMB 1216.7 billion, the largest single day increase in stock market value in the US market.
fourth quarter performance exceeded market expectations
According to the four seasons report, Amazon’s net sales in the fourth quarter of 2021 were US $137.412 billion, a year-on-year increase of 9%; The net profit was US $14.323 billion, a year-on-year increase of 98%. Goldman Sachs maintained Amazon’s rating as buy, with its latest target price of $4200.
By business, the net sales of AWS cloud platform in the fourth quarter was US $17.78 billion, a year-on-year increase of 40%. At the same time, Amazon also announced that it would raise the price of prime members in the United States, raising the monthly fee from $12.99 to $14.99 and the annual fee from $119 by nearly 17% to $139.
It can be seen that Amazon’s share price soared in part because the sales of its cloud computing business exceeded Wall Street’s expectations and the company raised the price of prime member subscription service in the United States for the first time since 2018.
It is worth mentioning that Citic Securities Company Limited(600030) called 2022 the year of Amazon’s performance improvement as early as December 21. Its views are summarized as follows: affected by factors such as supply chain disturbance, large investment in warehousing & logistics infrastructure and additional anti epidemic expenses, Amazon’s performance and stock price performance in 2021 are significantly weaker than comparable Internet giants such as Google and meta.
in 2022, Citic Securities Company Limited(600030) judged that the company’s performance is expected to improve significantly, mainly due to:
1) shipping congestion in the United States is gradually alleviated. With the addition of this year’s low base and the continuous flywheel effect brought by Prime members, the company’s e-commerce business is expected to accelerate significantly from 2022q2;
2) in the past two years, the storage and logistics area of the company has increased nearly twice. Referring to historical experience, the improvement of infrastructure is expected to provide solid support for the rapid growth of e-commerce business of the company in the next few years. The cyclical weakening of capital expenditure is also conducive to the significant improvement of the company’s profitability;
3) the global cloud computing market is still in the early stage of development, and AWS has a solid leading position. At present, the orders in hand exceed US $60 billion, and it is expected to maintain an annual growth rate of about 30% in the medium term. At present, the company’s EV / EBITDA (2022e) is only 21 times, which is at the middle and low level in the past decade. Based on good performance certainty and growth, superimposed with a reasonable valuation level, Citic Securities Company Limited(600030) regards the company as the top pick among the large market capitalization Internet companies in the United States in 2022.
in addition to cloud computing and film and television tracks, Amazon creates a new engine
In the field of cloud computing, old rivals Microsoft and Google are unwilling to fall behind. In 2014, cloud computing services became the largest business segment of Microsoft. Although Google started late, it put forward the grand goal of “becoming the second largest supplier in the field of cloud computing in 2023”. At the film and television entertainment track, its prime video has gained a firm foothold, and both original and non original films and television have achieved good results. It is worth mentioning that Amazon added weight again at the film and television entertainment track last year and bought MGM for us $8.45 billion.
In addition to the cloud computing and film and television entertainment track that we know to create better than expected performance for the fourth quarter, Amazon is also building new engines, such as a series of dazzling operations such as digital store, equipment hardware, offline retail and logistics, among which there are many successful examples. For example, Alexa and the derived echo smart speaker. So far, its popularity has exceeded 100 million units, and it performs well in long-distance voice control.
