【行业研究报告】阿里巴巴-China ecommerce to bottom out

BABAdeliveredupbeat1QFY23result,withrev/non-GAAPnetprofit+0%YoY/-
30%YoY,1%/6%aboveconsensus.Chinaecommercerev-1%YoY,inwhich
CMR-10%YoY(adsresilientwhilecommissionaffectedbyepidemic)withlower
takerate.Weviewthisresultaspositive,foritsbetter-than-fearedGMVtrend
(GMVimprovementinJulvs.Jun).WeexpectCMRtoachievepositivegrowthin
2HFY23E,iftheepidemicisnotworsening.NarrowinglossofTCCandTaobao
Dealswouldcontinue,coupledwithbetterUEoflocalservices.Cloud
deceleration(+10%YoYin1QFY23)waswellanticipatedbythemarket,andwe
viewitsguidanceofslowergrowthin2H22Easacceptable.Weslightlyrevised
upitsearningsforecastby0-1%inFY22-24Etoreflectbettercostcontrol,with
TPatUS$151.0.Suggesttobuyondips,givenitsattractivevaluationandrecovery
insight.
1QFY23beatonmargin.1QFY23rev+0%YoY(1%/1%above
consensus/ourestimate),inwhichChinacommerce/international
consensus/ourestimate),inwhichChinacommerce/international
commerce/localservice/Cainiao/Cloud/DME-1%/+2%/+5%/+5%/+10%/-
10%YoY(vs.ourestimateof-4%/+5%/+5%/+5%/+10%/+3%YoY).Non-
GAAPnetprofit-30%YoY,6%/12%aboveconsensus/ourestimate.Adj.
EBITAmargincameoutat16.7%(-3pptsYoY,+9pptsQoQ),aboveour
estimateof13%.
Theworstisbehind,withbetter-than-fearedCMRtrend.1QFY23CMR
-10%YoY(vs.0%in4QFY22),aboveourestimateof-11%YoY.GMV
declinedmid-single-digitYoYinJun,inwhichApr&MayGMVdeclinedlow-
teensYoYand618GMVachievedpositivegrowth.Mgmt.statedJulGMV
YoYtrendimprovedfromJun,suggestingbetter-than-expectedrecovery.
ChinaEcommerceEBITAmargincameoutat31%,aboveourestimateof
28%.Withcontinuouslynarrowingloss(QoQ)fromTCCandlocalservice,
wearepositiveonmargintrendinnextfewquarters.Localservicesrev+5%
(inlinewithourestimate),andwesuggesttomoveinto2H22reboundand
UEimprovementwithlockdownsdisruptionrelaxation.Cloudchallenges
(rev+10%YoY)werewell-anticipated,and2H22Emightseeslowergrowth
forshrinkingdemandfrominternetverticals.
MaintainBUY.Welifteditsearningsforecastby0-1%inFY22-24E,with
SOTP-basedTPatUS$151.0(21xFY23EP/E).Valuationisattractive,
consideringitsupcomingGMVgradualrecovery,bettermarginoutlookand
already-lowfinancialsexpectation.