BABA: Economic Stimulus Could Set In Soon; Positive On FY1Q24E Performance
We are positive on BABA’s FY1Q24E performance. The long-awaited economic stimulus is likely to come soon. On June 25th, the State Think Tank CMF released its paper “Solidifying Foundation for Recovery, China’s Macroeconomy in 2023” (/imeeting/hyt/detail/29925). The paper not only pointed out 5 main issues but also emphasized that these issues cannot be resolved by themselves. Instead, it will take a set of stimulus measures from the State to fix the problems. We believe the paper sets up the direction for upcoming stimulus actions. In addition, BABA is refocusing on low priced Taobao. As China’s economy is undergoing a slow recovery, the low-price approach seems to be suitable for the current environment. QM reported that in this year’s “6.18” sales event, approximately 674M people in China participated, of which ~500M were on Taobao.
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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