BABA: Positive On Margins In FY2Q24E; Slower Topline Growth Has Been Priced In
We are positive on BABA’s FY2Q24E performance. The slower than expected economic recovery has put pressure on BABA and other e-commerce companies in China. The central government’s economic stimulus did not officially come until August 2023 as a decision was made from the Politburo Meeting on Economy on July 24th. In the last 10 consecutive months, the central bank has been conducting aggressive MLF (medium-term lending facility) operations. In September alone, MLF was RMB591B. We believe the abundance of liquidity is going to be reflected in China’s economy sooner or later. BABA’s overseas business is performing better due to its own efforts as well as less pressure from TikTok, as the social media platform is prohibited from conducting social commerce in Indonesia.
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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