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

Equity Bottom-Up

<ul>
<li>BABA reported CY1Q24 top line, GAAP operating profit and non-GAAP net income 0.9%, (4.6%) and (6.7%) vs. consensus, and in-line, in-line, (6.9%) vs. our estimate;</li>
<li>Results reaffirmed our positive view as increased investment is leading to significant improvement in key businesses: (1) Taobao/Tmall stabilized, (2) overseas e-commerce accelerated along with overseas AntFin and Cainiao</li>
<li>We expect pay-off from its strategy shift in 2H of the year. Spin-off, dividends,and share buy-backs provide valuation support until then.We maintain BUY and US$85 TP, implying 9.5x CY25 P/E.</li>
</ul>


BABA reported CY1Q24 top line, GAAP operating profit and non-GAAP net income 0.9%, (4.6%) and (6.7%) vs. consensus, and in-line, in-line, (6.9%) vs. our estimate;
Results reaffirmed our positive view as increased investment is leading to significant improvement in key businesses: (1) Taobao/Tmall stabilized, (2) overseas e-commerce accelerated along with overseas AntFin and Cainiao
We expect pay-off from its strategy shift in 2H of the year. Spin-off, dividends,and share buy-backs provide valuation support until then.We maintain BUY and US$85 TP, implying 9.5x CY25 P/E.


[Alibaba (BABA US, BUY, TP US$85) Review]: Positive Transformation Still Underway…BUY on Dip

Analyst

Steve

<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

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.</li>
<li>Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.</li>
<li>We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.</li>
</ul>


Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.
Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.
We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.


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 (BABA US)

[Alibaba (BABA US, BUY, TP US$85) Review]: Positive Transformation Still Underway…BUY on Dip

BABA reports mixed Q1 results but positive outlook with increased investment leading to improvement in key businesses, expecting payoff in 2H of...

Blue Lotus Research Institute

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

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

Alibaba (BABA US): Taobao/Tmall Is Back

Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...

Eric Chen

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[Alibaba (BABA US, BUY, TP US$85) Review]: Positive Transformation Still Underway…BUY on Dip

​BABA reports mixed Q1 results but positive outlook with increased investment leading to improvement in key businesses, expecting payoff in 2H of...

Blue Lotus Research Institute

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

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

Alibaba (BABA US): Taobao/Tmall Is Back

​Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...

Eric Chen

BABA reports mixed Q1 results but positive outlook with increased investment leading to improvement in key businesses, expecting payoff in 2H of...

Alibaba's 4QFY24 results show in-line revenue but lower adjusted net income due to losses in peripheral businesses, but strong core performance...