Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Equity Analyst with 15+ years of experience as a Buy Side analyst covering companies in the Emerging and Developed markets.
Fundamental and Quantitative analysis on companies in the Internet, Telecommunication, Media, Technology, IT Services, Healthcare, Pharmaceutical and other Industrial sectors.
Idea generation focussed on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Global Emerging Market Equities

China Online Retail Sales Tracker: April and May Sales Growth Slows on Unfavorable Comps

Vipshop (VIPS US): Tantalizing Value for China's Discount Brand Retailer

China E-Commerce: 6.18 Festival Getting Bigger - Good for Alibaba, JD, Vipshop

Alibaba (BABA US): Ant Group Woes Overly Priced-In

VIPS US: 4Q20: Commendable Reincarnation but Fully Priced

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Equity Bottom-Up

<p>The Chinese eCommerce sector has been affected by increased regulatory scrutiny from the State Administration for Market Regulation (SAMR) which has been a headwind to most companies in the sector. However, during this time, <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> has meaningfully outperformed peers, driven by an acceleration in active user numbers. <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, in turn, has significantly underperformed peers, driven by an overhaul of regulation affecting, not only, its 33%-owned <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>, but also its core Chinese marketplace operations. </p><p>Having previously explored the prospects for Alibaba Group in more detail (<a href="https://www.smartkarma.com/insights/alibaba-a-detailed-look-at-the-sotp-and-what-that-tells-us-about-the-ant-group-and-core-commerce" target="_blank" data-smartkarma-citation="insights:47981" rel="noopener">Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce</a> ), in this insight, I take a closer look at the comparative valuations between Chinese niche apparel flash sales company, Vipshop Holdings, and Chinese marketplace behemoth, Alibaba Group, as it relates to their regulatory challenges, competitive positioning, and medium-term growth outlook.</p>

The Chinese eCommerce sector has been affected by increased regulatory scrutiny from the State Administration for Market Regulation (SAMR) which has been a headwind to most companies in the sector. However, during this time, Vipshop Holdings (VIPS US) has meaningfully outperformed peers, driven by an acceleration in active user numbers. Alibaba Group (9988 HK), in turn, has significantly underperformed peers, driven by an overhaul of regulation affecting, not only, its 33%-owned Ant Financial Services Group (6688 HK), but also its core Chinese marketplace operations. Having previously explored the prospects for Alibaba Group in more detail (Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce ), in this insight, I take a closer look at the comparative valuations between Chinese niche apparel flash sales company, Vipshop Holdings, and Chinese marketplace behemoth, Alibaba Group, as it relates to their regulatory challenges, competitive positioning, and medium-term growth outlook.

Long/Short: Alibaba/Vipshop, a Comparative Valuation