Analyst

Steve Zhou, CFA

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>On first look, <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> missed on margins in 4QFY24 as adjusted EBITA declined by 5% yoy.</li>
<li>We can give the company the benefit of the doubt given that the important segments of the company are heading into the right direction.  </li>
<li>Alibaba returned USD13.4bn and USD16.5bn to shareholders in FY23 and FY24, compared to the current market cap of USD197bn</li>
</ul>


On first look, Alibaba Group Holding (9988 HK) missed on margins in 4QFY24 as adjusted EBITA declined by 5% yoy.
We can give the company the benefit of the doubt given that the important segments of the company are heading into the right direction.  
Alibaba returned USD13.4bn and USD16.5bn to shareholders in FY23 and FY24, compared to the current market cap of USD197bn


Alibaba (9988 HK):  Core Segments Moving Into The Right Direction

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

Lalatech Holdings Co Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lalatech-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:36848:1" rel="noopener">Lalatech Holdings</a> is looking to raise about US$1bn in its upcoming HK IPO.</li>
<li>Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.</li>
<li>We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.</li>
</ul>



Lalatech Holdings is looking to raise about US$1bn in its upcoming HK IPO.
Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.


Lalatech Holdings Limited Pre-IPO - Refiling Updates - Continues to Improve, Valuation Gap Narrowing

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>Post market close tomorrow, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 7 June.</li>
<li>There were no constituent changes to the index in March. We highlight ten profitable and eligible stocks that could be added to the index in June.</li>
<li>Changes to the Hang Seng Industry Classification System (HSICS) could lead to inclusions for the Information Technology industry while there could also be inclusions for the underweighted Healthcare industry.</li>
</ul>


Post market close tomorrow, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 June.
There were no constituent changes to the index in March. We highlight ten profitable and eligible stocks that could be added to the index in June.
Changes to the Hang Seng Industry Classification System (HSICS) could lead to inclusions for the Information Technology industry while there could also be inclusions for the underweighted Healthcare industry.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>The slowdown in Chinese retail sales of apparel seems to have been factored into <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a> 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.</li>
<li>With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.</li>
<li>Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.</li>
</ul>


The slowdown in Chinese retail sales of apparel seems to have been factored into Vipshop Holdings (VIPS US) 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.
With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.
Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.


Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

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.


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 (9988 HK)

Alibaba (9988 HK): Core Segments Moving Into The Right Direction

On first look, Alibaba Group (9988 HK) missed on margins in 4QFY24 as adjusted EBITA declined by 5% yoy, though I believe important segments of the...

Steve Zhou, CFA

Lalatech Holdings Limited Pre-IPO - Refiling Updates - Continues to Improve, Valuation Gap Narrowing

Lalatech Holdings is looking to raise about US$1bn in its upcoming HK IPO. In this note, we look at the updates from its most recent refiling.

Sumeet Singh

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June

The move to 100 constituents is expected to drag on into 2025. We highlight 10 stocks that could be considered for inclusion in the HSI in June....

Brian Freitas

Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

In this insight, we analyse Vipshop’s growth outlook, referencing reported Chinese retail sales data, its margin progression, strong balance sheet,...

Wium Malan, CFA

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

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