Tian Hou
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BABA / 9988.HK: Regulatory Uncertainties Still A Concern But It Has Lessened; BABA Paving Ways For Better Growth In 2022

BABA will report FY1Q22 results on August 3rd before the markets open with a 7:30am EST conference call. We are neutral on Alibaba due to uncertainties on the regulatory front. However, while dealing with the uncertainties in CY2Q21, BABA was putting in place new measures on both Tmall and Taobao aiming to acquire and retain merchants. We believe these measures are positive for BABA’s growth next year. In the near-term, these measures and BABA’s investments are likely to put pressure on its margins. One of the investment areas is community grocery buying (GCB), and we believe BABA is likely to leverage Hema’s network and capacity to be different from Meituan (3690.HK, HK$275.20, Not Rated) and PDD (PDD, $101.68, Not Rated). Based on our data and model, BABA’s revenue in FY1Q22E is likely to be at least in line with consensus at RMB210,543M (36.9% Y/Y growth).

Alibaba Group Holding (P Chip)

Alibaba Group Holding Ltd

T.H. Capital
T.H. Capital

​T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.

Tian Hou

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