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.

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>We believe revenue will grow by 6% YoY in 4Q24, but by 11% for FY2026 (roughly 2025 calendar year).</li>
<li>We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run.</li>
<li>We conclude the stock has an upside of 46% and a price target of US$120.</li>
</ul>


We believe revenue will grow by 6% YoY in 4Q24, but by 11% for FY2026 (roughly 2025 calendar year).
We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run.
We conclude the stock has an upside of 46% and a price target of US$120.


Alibaba (BABA US) 4Q24 Preview: Many Moves Under One-Digit Growth, 46% Upside

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>We expect Alibaba to deliver in-line-with-consensus revenue growth for 4QFY24.</li><li>Although escalated investment in international business, cloud, and Taobao and Tmall (T&amp;T) Group, as well as strategically important new businesses is likely to put some short-term pressure on margin expansion, we remain positive on Alibaba’s long-term growth potential.</li><li>Alibaba remains committed to improving shareholder return by achieving loss reduction in non-core business, and enhancing share buyback and dividend payout, which in our view should provide support for near-term valuation. </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>

We expect Alibaba to deliver in-line-with-consensus revenue growth for 4QFY24.Although escalated investment in international business, cloud, and Taobao and Tmall (T&amp;T) Group, as well as strategically important new businesses is likely to put some short-term pressure on margin expansion, we remain positive on Alibaba’s long-term growth potential.Alibaba remains committed to improving shareholder return by achieving loss reduction in non-core business, and enhancing share buyback and dividend payout, which in our view should provide support for near-term valuation. 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) - Driving Long-Term Growth While Enhancing Shareholder Return

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>We expect Alibaba to report CY1Q24 top-line, non-GAAP EBITA and non-GAAP net income in-line, (14.2%) and (7.4%) vs. consensus. We cut non-GAAP EBITA by 10% and kept topline unchanged;</li>
<li>BABA is prioritizing growth of both AliCloud and cross-border ecommerce (AliExpress), which will weaken profitability in the near-term but is the right thing to do. </li>
<li>BABA is transforming itself into Chinese Microsoft with hopes of e-commerce mainly pinned on overseas. We maintain BUY and US$ 85 TP, implying 9.5x CY24 P/E.</li>
</ul>


We expect Alibaba to report CY1Q24 top-line, non-GAAP EBITA and non-GAAP net income in-line, (14.2%) and (7.4%) vs. consensus. We cut non-GAAP EBITA by 10% and kept topline unchanged;
BABA is prioritizing growth of both AliCloud and cross-border ecommerce (AliExpress), which will weaken profitability in the near-term but is the right thing to do. 
BABA is transforming itself into Chinese Microsoft with hopes of e-commerce mainly pinned on overseas. We maintain BUY and US$ 85 TP, implying 9.5x CY24 P/E.


Spending on Customers Precedes Customer Spending

Analyst

Steve

<ul>
<li>It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).</li>
<li>Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. </li>
<li>Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.</li>
</ul>


It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).
Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. 
Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.


Alibaba (9988 HK):  Value Proposition Looks Clean

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>Alibaba Group’s office messaging and meeting app DingTalk is allowing users of Tencent Holdings’ rival social media app WeChat to directly join any meeting initiated on DingTalk without first registering.</li><li>DingTalk users can now share a meeting link with WeChat users, who can enter the meeting within WeChat.</li><li>Previously, DingTalk required participants to download its meeting app and register.</li></ul>

Alibaba Group’s office messaging and meeting app DingTalk is allowing users of Tencent Holdings’ rival social media app WeChat to directly join any meeting initiated on DingTalk without first registering.DingTalk users can now share a meeting link with WeChat users, who can enter the meeting within WeChat.Previously, DingTalk required participants to download its meeting app and register.

Alibaba, Tencent Continue to Tear Down Walls Between Their Meeting Platforms 

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) 4Q24 Preview: Many Moves Under One-Digit Growth, 46% Upside

We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run. We conclude the stock has an...

Ming Lu

Alibaba (BABA US) - Driving Long-Term Growth While Enhancing Shareholder Return

Alibaba remains committed to improving shareholder return by achieving loss reduction in non-core business, and enhancing share buyback and...

CMB International

Spending on Customers Precedes Customer Spending

Alibaba expected to report in-line earnings, prioritizing growth of AliCloud and AliExpress despite near-term profitability concerns. Maintaining...

Blue Lotus Research Institute

Alibaba (9988 HK): Value Proposition Looks Clean

According to public news, Jack Ma has written a long post in Alibaba's internal website, titled "To reform, to innovation". This is the first...

Steve

Alibaba, Tencent Continue to Tear Down Walls Between Their Meeting Platforms

Alibaba Group’s office messaging and meeting app DingTalk is allowing users of Tencent Holdings’ rival social media app WeChat to directly join...

Caixin Global

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Alibaba (BABA US) 4Q24 Preview: Many Moves Under One-Digit Growth, 46% Upside

We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run. We conclude the stock has an...

Ming Lu

Alibaba (BABA US) - Driving Long-Term Growth While Enhancing Shareholder Return

Alibaba remains committed to improving shareholder return by achieving loss reduction in non-core business, and enhancing share buyback and...

CMB International

Spending on Customers Precedes Customer Spending

​Alibaba expected to report in-line earnings, prioritizing growth of AliCloud and AliExpress despite near-term profitability concerns. Maintaining...

Blue Lotus Research Institute

Alibaba (9988 HK): Value Proposition Looks Clean

According to public news, Jack Ma has written a long post in Alibaba's internal website, titled "To reform, to innovation". This is the first...

Steve

Alibaba, Tencent Continue to Tear Down Walls Between Their Meeting Platforms

Alibaba Group’s office messaging and meeting app DingTalk is allowing users of Tencent Holdings’ rival social media app WeChat to directly join...

Caixin Global

Alibaba expected to report in-line earnings, prioritizing growth of AliCloud and AliExpress despite near-term profitability concerns. Maintaining...