China/Asia TMT

Shawn Yang

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

Equity Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>BABA reported 1Q23 revenue/non-GAAP net income in-line/17.7% vs. cons. International commerce and local services revenues beat our est., while Cloud missed.</li>
<li>We expect there is still room for margin improvement in FY24. Although Taobao/Tmall will increase spending, the cost savings of other business groups will lead to an overall improvement; </li>
<li>We maintain BUY and US$ 109 TP as (1) Douyin’s impact is becoming less significant; (2) International business is growing quickly; and (3) Positive on the effect of separate listing.  </li>
</ul>


BABA reported 1Q23 revenue/non-GAAP net income in-line/17.7% vs. cons. International commerce and local services revenues beat our est., while Cloud missed.
We expect there is still room for margin improvement in FY24. Although Taobao/Tmall will increase spending, the cost savings of other business groups will lead to an overall improvement; 
We maintain BUY and US$ 109 TP as (1) Douyin’s impact is becoming less significant; (2) International business is growing quickly; and (3) Positive on the effect of separate listing.  


[Alibaba (BABA US, BUY, TP US$109) Earnings Review]: Taobao Growth to Return on Douyin Slow-Down

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-dmall-e-commerce-co-ltd" target="_blank" data-smartkarma-citation="entities:36623:1" rel="noopener">Dmall Inc (1751691D CH)</a> is looking to raise around US$200m in its upcoming Hong Kong IPO.</li>
<li>Dmall provides cloud-based, end-to-end SaaS platform purpose-built for the Chinese retail industry.</li>
<li>In this note, we will talk about the not so positive aspects of the deal.</li>
</ul>



Dmall Inc (1751691D CH) is looking to raise around US$200m in its upcoming Hong Kong IPO.
Dmall provides cloud-based, end-to-end SaaS platform purpose-built for the Chinese retail industry.
In this note, we will talk about the not so positive aspects of the deal.


Dmall Pre-IPO - The Negatives - Path to Profitability Remains Murky and Related Party Sales an Issue

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Alibaba’s revenue from physical stores decreased year over year for the first time.</li>
<li>The operating margin declined despite that Alibaba cut losses in minor businesses.</li>
<li>We conclude an upside of 15% and a price target at HK$101. Downgrade to Hold.</li>
</ul>


Alibaba’s revenue from physical stores decreased year over year for the first time.
The operating margin declined despite that Alibaba cut losses in minor businesses.
We conclude an upside of 15% and a price target at HK$101. Downgrade to Hold.


Alibaba (9988 HK): 4Q23, Physical Store Revenue Decreased for First Time, Downgrade to Hold

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 (ADR) (BABA US)</a>'s 4QFY23 OP beat consensus by around RMB 2.5bn (20% beat) through cost cutting, but YoY revenue growth remained sluggish at 2.0%.</li>
<li>Consensus expectations of Alibaba achieving an OP of RMB 150bn by FY25 may be overly optimistic due to declining dominance of Taobao and Tmall, and lack of profitable alternative businesses.</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> would need to excel to reach RMB100bn OP, resulting in a high FY+2 EV/OP of 14.0x. This seems steep for a company with minimal earnings growth.</li>
</ul>



Alibaba (ADR) (BABA US)'s 4QFY23 OP beat consensus by around RMB 2.5bn (20% beat) through cost cutting, but YoY revenue growth remained sluggish at 2.0%.
Consensus expectations of Alibaba achieving an OP of RMB 150bn by FY25 may be overly optimistic due to declining dominance of Taobao and Tmall, and lack of profitable alternative businesses.

Alibaba Group (9988 HK) would need to excel to reach RMB100bn OP, resulting in a high FY+2 EV/OP of 14.0x. This seems steep for a company with minimal earnings growth.


Alibaba 4QFY23: Concerns Surrounding Taobao and Tmall, Disappointing IPO-Bound Cloud & Cainiao

Ethan Aw

AUB Group Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aub-group-limited" target="_blank" data-smartkarma-citation="entities:11179:1" rel="noopener">AUB Group Limited (AUB AU)</a> is looking to raise up to AUD150m (US$100m) in its primary placement. The proceeds will be used to strengthen its balance sheet.</li>
<li>The deal would be a large one to digest at 24 days of three month ADV and dilution of 6.2%.  </li>
<li>In this note, we'll run the deal through our ECM framework and comment on deal dynamics.</li>
</ul>



AUB Group Limited (AUB AU) is looking to raise up to AUD150m (US$100m) in its primary placement. The proceeds will be used to strengthen its balance sheet.
The deal would be a large one to digest at 24 days of three month ADV and dilution of 6.2%.  
In this note, we'll run the deal through our ECM framework and comment on deal dynamics.


AUB Group Placement - Came as a Surprise but Strong Track Record Makes up for It

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, BUY, TP US$109) Earnings Review]: Taobao Growth to Return on Douyin Slow-Down

We maintain BUY and US$ 109 TP as (1) Douyin’s impact is becoming less significant; (2) International business is growing quickly; and (3) Positive...

Blue Lotus Research Institute

Alibaba (9988 HK): 4Q23, Physical Store Revenue Decreased for First Time, Downgrade to Hold

Alibaba’s revenue from physical stores decreased year over year for the first time. The operating margin declined despite that Alibaba cut losses...

Ming Lu

Alibaba 4QFY23: Concerns Surrounding Taobao and Tmall, Disappointing IPO-Bound Cloud & Cainiao

Alibaba's IPO-bound Cainiao saw a lower YoY revenue growth rate of 17.6%. The Cloud unit experienced a 2.1% YoY revenue decline, its first recorded...

Oshadhi Kumarasiri

AUB Group Placement - Came as a Surprise but Strong Track Record Makes up for It

AUB Group is looking to raise up to AUD150m (US$100m) in its primary placement. In this note, we'll run the deal through our ECM framework and...

Ethan Aw

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Alibaba (BABA US, BUY, TP US$109) Earnings Review]: Taobao Growth to Return on Douyin Slow-Down

We maintain BUY and US$ 109 TP as (1) Douyin’s impact is becoming less significant; (2) International business is growing quickly; and (3) Positive...

Blue Lotus Research Institute

Dmall Pre-IPO - The Negatives - Path to Profitability Remains Murky and Related Party Sales an Issue

Dmall Inc (1751691D CH) is looking to raise around US$200m in its upcoming Hong Kong IPO. In this note, we will talk about the not so positive...

Clarence Chu

Alibaba (9988 HK): 4Q23, Physical Store Revenue Decreased for First Time, Downgrade to Hold

Alibaba’s revenue from physical stores decreased year over year for the first time. The operating margin declined despite that Alibaba cut losses...

Ming Lu

Alibaba 4QFY23: Concerns Surrounding Taobao and Tmall, Disappointing IPO-Bound Cloud & Cainiao

Alibaba's IPO-bound Cainiao saw a lower YoY revenue growth rate of 17.6%. The Cloud unit experienced a 2.1% YoY revenue decline, its first recorded...

Oshadhi Kumarasiri

AUB Group Placement - Came as a Surprise but Strong Track Record Makes up for It

AUB Group is looking to raise up to AUD150m (US$100m) in its primary placement. In this note, we'll run the deal through our ECM framework and...

Ethan Aw