Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.</li>
<li>Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.</li>
<li>We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.</li>
</ul>


Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.
Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.
We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.


External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Alibaba reported 4QFY24 (March year-end) results: total revenue was RMB221.9bn, up 6.6% YoY, and non-GAAP net income for the quarter was RMB25.3bn, down 9.4% YoY, owing to investment to drive user experience improvement and GMV growth of domestic business, as well as international business expansion.</li><li>For FY24, total revenue reached RMB941.2bn, up 8.3% YoY, and non-GAAP net income was RMB158.4bn, up 10% YoY.</li><li>Management highlighted solid progress regarding its investment to support market share gains of core business, with Taobao &amp; Tmall (T&amp;T) Group GMV grew double digits YoY, international commerce retail revenue grew 56% YoY, and AI-related cloud revenue grew triple digits YoY in 4QFY24.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Alibaba reported 4QFY24 (March year-end) results: total revenue was RMB221.9bn, up 6.6% YoY, and non-GAAP net income for the quarter was RMB25.3bn, down 9.4% YoY, owing to investment to drive user experience improvement and GMV growth of domestic business, as well as international business expansion.For FY24, total revenue reached RMB941.2bn, up 8.3% YoY, and non-GAAP net income was RMB158.4bn, up 10% YoY.Management highlighted solid progress regarding its investment to support market share gains of core business, with Taobao &amp; Tmall (T&amp;T) Group GMV grew double digits YoY, international commerce retail revenue grew 56% YoY, and AI-related cloud revenue grew triple digits YoY in 4QFY24.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alibaba (BABA US) - Business Adjustment Shows Greater Visibility in Delivering Results

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group Holding (BABA US)</a>'s FQ4 announcement portrays a resilient comeback to growth, suggesting the past four years' challenges barely impacted its dominance in Chinese e-commerce.</li>
<li>However, a closer look beyond the surface of <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>'s FQ4 results announcement reveals that little has actually changed in recent months.</li>
<li>Taobao and Tmall face challenges in a tough, stagnant market; AIDC's growth largely covers for other Alibaba units' failings, while AliExpress's expansion cuts into margins.</li>
</ul>



Alibaba Group Holding (BABA US)'s FQ4 announcement portrays a resilient comeback to growth, suggesting the past four years' challenges barely impacted its dominance in Chinese e-commerce.
However, a closer look beyond the surface of Alibaba Group Holding (9988 HK)'s FQ4 results announcement reveals that little has actually changed in recent months.
Taobao and Tmall face challenges in a tough, stagnant market; AIDC's growth largely covers for other Alibaba units' failings, while AliExpress's expansion cuts into margins.


Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Customer management as the largest business began to increase compared to the past two stagnant quarters.</li>
<li>We believe margin will continue to decline as the company turned its focus to growth.</li>
<li>We conclude an upside of 41% for March 2025 based on peer companies’ P/S ratios.</li>
</ul>


Customer management as the largest business began to increase compared to the past two stagnant quarters.
We believe margin will continue to decline as the company turned its focus to growth.
We conclude an upside of 41% for March 2025 based on peer companies’ P/S ratios.


Alibaba (9988 HK): 4Q24, Main Business Began to Grow

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Along with its fiscal 2024 results, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> announced that they were preparing for their primary listing in Hong Kong and the conversion was expected to complete by August.</li>
<li>If the conversion is completed by the end of August, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a> could be added to Southbound Stock Connect in September and that could bring in significant flows.</li>
<li>We do not forecast any passive inflows due to the change with <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> capped at 8% of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> indices.</li>
</ul>


Along with its fiscal 2024 results, Alibaba (9988 HK) announced that they were preparing for their primary listing in Hong Kong and the conversion was expected to complete by August.
If the conversion is completed by the end of August, Alibaba (9988 HK) could be added to Southbound Stock Connect in September and that could bring in significant flows.
We do not forecast any passive inflows due to the change with Alibaba Group Holding (9988 HK) capped at 8% of the HSI, HSCEI and HSTECH indices.


Alibaba (9988 HK): Dual Primary Listing & Potential Southbound Flows

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (BABA US)

Alibaba (BABA US): Taobao/Tmall Is Back

Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...

Eric Chen

Alibaba (BABA US) - Business Adjustment Shows Greater Visibility in Delivering Results

Alibaba reported 4QFY24 (March year-end) results: total revenue was RMB221.9bn, up 6.6% YoY, and non-GAAP net income for the quarter was RMB25.3bn,...

CMB International

Alibaba: Our Take on 4QFY24

Taobao and Tmall face challenges in a tough, stagnant market; AIDC's growth largely covers for other Alibaba units' failings, while AliExpress's...

Oshadhi Kumarasiri

Alibaba (9988 HK): 4Q24, Main Business Began to Grow

Customer management as the largest business began to increase compared to the past two stagnant quarters. We believe margin will continue to...

Ming Lu

Alibaba (9988 HK): Dual Primary Listing & Potential Southbound Flows

Alibaba expect to convert to a Primary Listing on the HKEX by end August. That could mean inclusion in Southbound Stock Connect in September. With...

Brian Freitas

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Alibaba (BABA US): Taobao/Tmall Is Back

​Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...

Eric Chen

Alibaba (BABA US) - Business Adjustment Shows Greater Visibility in Delivering Results

Alibaba reported 4QFY24 (March year-end) results: total revenue was RMB221.9bn, up 6.6% YoY, and non-GAAP net income for the quarter was RMB25.3bn,...

CMB International

Alibaba: Our Take on 4QFY24

Taobao and Tmall face challenges in a tough, stagnant market; AIDC's growth largely covers for other Alibaba units' failings, while AliExpress's...

Oshadhi Kumarasiri

Alibaba (9988 HK): 4Q24, Main Business Began to Grow

Customer management as the largest business began to increase compared to the past two stagnant quarters. We believe margin will continue to...

Ming Lu

Alibaba (9988 HK): Dual Primary Listing & Potential Southbound Flows

Alibaba expect to convert to a Primary Listing on the HKEX by end August. That could mean inclusion in Southbound Stock Connect in September. With...

Brian Freitas

Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...