EUR 232.10 For Business Accounts Only

BABA: China’s Economic Slowdown Has Been Mostly Priced In; Policy Risk For BABA Is Lowered; Optimistic For 2022

BABA will report FY3Q22 results on February 24^th before the markets open with a 7:30am EST conference call. Starting from December 2021, China’s economy showed significant weakness. For e-commerce, both retail and logistic parcel volumes showed soft growth. As the weakness worsened in January 2022, we believe the government is likely to put stimulus measures in place at a faster pace than expected. Therefore, we are likely to be at the bottom of such economic weakness in China. As a company that is big enough to represent China’s economy, we believe BABA is likely to benefit from upcoming stimulus policies. In terms of political risk, the government’s priority in 2022 is to stabilize and stimulate the economy. Most of the regulations toward internet companies already came out in 2021; therefore, the political risk for BABA is low. As such, we are positive on Alibaba’s 2022.