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<Research>BOCOMI: CN E-commerce Valuations Still Low; BABA-W May Ride on Southbound Connect, Higher Monetization Capability
Recommend 26 Positive 52 Negative 12 |
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BOCOMI’s report stated that, in terms of prospects, Taobao and Tmall under BABA-W (09988.HK) had stable market share. The broker expected a high-single-digit growth in GMV for the September quarter. Considering the gradual realization of the effects of full-site promotion and the collection of technical service fees from Taobao/ Goofish merchants starting in September, monetization will continue to progress in the next few quarters. The second was Pinduoduo (PDD.US). The broker viewed that mainland e-commerce companies have a solid mentality in high cost-effective, and that its GMV growth rate will continue to outpace the broader market. The monetization rate may fluctuate from quarter to quarter due to ecological governance strategies. The third was JD-SW (09618.HK). It was expected that the gradual implementation of trade-in subsidies will fuel a recovery in sales of electronic products. In 3Q24, GMV was estimated to grow by a mid-to-high single-digit percentage. The supply chain capability enhancement will continue to optimize profit. The fourth was KUAISHOU-W (01024.HK), which was expected to see a slowdown in GMV growth to 15% in 3Q24 due to ongoing negative impacts such as competition. In terms of investment prospects, BOCOMI pointed out that mainland e-commerce companies’ profits in 2Q24 beat consensus, thanks to effective cost control and better-than-expected improvement in the monetization rate of the platform. The current prices corresponded to the 2024E PE at 9.7x for Alibaba, 7x for JD.com, 6.7x for Pinduoduo, and 8.5x for Kuaishou. The valuations are still low. Alibaba may benefit from Southbound Stock Connect and improved monetization capabilities; JD.com's profit continues to improve; Pinduoduo may continue to seize market share, but the monetization rate may fluctuate from quarter to quarter, leading to stock price fluctuations; Kuaishou's short-term GMV growth is under pressure, but there is still potential for purchase user penetration to improve. AAStocks Financial News |
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