BABA/9988.HK: Scaling Down Of Online Finance Business May Lead To Slower Growth Of GMV in CY2021; But May Be Offset By Better Operation And Other Initiatives
In our opinion, the new rules on microfinancing as well as investigation in Ant Group are likely to have some longer-term impact on e-commerce. With the new “Interim Measurement for Online Microfinancing Business” issued on November 2nd by the China Banking and Insurance Regulatory Commission and the People’s Bank of China, potentially BABA’s business of Huabei and Jiebei are likely to be scaled down, which may eventually cause some level of slowdown of GMV growth on BABA’s platform in 2021. However, other initiatives are likely to offset the negative impacts. BABA will report FY3Q21 earnings on February 2nd before the markets open with a 7:30am EST conference call. Based on our data and model, we believe revenue is likely to be better than consensus.
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.
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