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

[Alibaba (BABA US, BUY, TP US$109) Earnings Preview]: Recovery Is on the Way Amid Weakness in C1Q23

China/Asia TMT

Shawn Yang

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