T. H. Data Flash - Alibaba Group – November & FY3Q22E: Negatives From Regulations Are Mostly Behind BABA; Recent Developments Are Positive; Expectation Is Low
We are positive on Alibaba’s FY3Q22E performance relative to the Street expectation. BABA’s issues with regulators started from Oct. 2020. Since then, the new regulations have not only impacted BABA, but the entire internet sector in China. As the first company to experience the pressure, we believe BABA is likely to come out of business contraction soon and refocus on growth. The recent internal personnel changes are likely to lead to a relatively decentralized power structure, which we believe is positive for BABA’s future growth. In addition, the open-up of Wechat platform to vendors in China including BABA can be positive to BABA for additional traffic. The underlying positives along with very low expectations for its future growth are likely to point BABA to a turning point.
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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