Investment Rating - Maintain BUY rating with a target price of USD 124.50, indicating a potential upside of 60% from the current price [57]. Core Insights - The report highlights a significant decline in Alibaba's market share in China's e-commerce sector, dropping from 71.4% in 2018 to 39.4% in 2023, with a projected further decline to 37.2% in 2024, suggesting a stabilization of share loss [2]. - The competition from content-based e-commerce platforms like Douyin and Kuaishou, as well as Pinduoduo, has intensified, impacting Taobao and Tmall's market position [5][6]. - Alibaba's strategy is shifting from "helping make business" to "helping improve business," focusing on enhancing efficiency and profit margins rather than solely driving GMV growth [11]. - The total retail sales of consumer goods in China increased from RMB 29 trillion in 2015 to RMB 47 trillion in 2023, with Alibaba's GMV rising from RMB 3 trillion in FY16 to approximately RMB 8 trillion in FY24, indicating its growing importance in the retail landscape [13]. Summary by Sections E-commerce Market Dynamics - The e-commerce market in China is experiencing a shift, with content-based platforms gaining traction and affecting traditional e-commerce models [5][6]. - Pinduoduo's rapid growth is attributed to its focus on low-tier cities and effective demand creation strategies, similar to Taobao's early days [6][7]. Financial Performance - T&T Group achieved a revenue growth of 5.2% year-on-year for FY24, with expectations of high-single-digit GMV growth for the retail business in FY25 [40]. - The adjusted EBITA for T&T Group increased by 3.0% year-on-year, with a margin of 44.8%, reflecting the impact of revenue mix changes [41]. Future Outlook - The report anticipates a positive cycle for Alibaba driven by user subsidies and improved monetization tools, which could enhance profit margins and support growth [54]. - The potential inclusion in the Hong Kong Stock Connect is expected to attract significant capital inflows, further bolstering Alibaba's market position [55].

Equity Research Report Melco International Development (200 HK) GGR Rally Underperformed Sector's in 2024 Huatai Research 15 August 2024 | China (Hong Kong) Quick Take Gambling BUY, target price of HKD5.60 based on 2025E EV/EBITDA of 7.0x Melco Resorts & Entertainment (MLCO US), subsidiary of Melco International Development, has released 2Q24 results; net income was USD1,160mn (+4.3% qoq), adjusted property EBITDA was USD303mn (+1.3% gog; 68% of 2Q19 level), and property EBITDA margin was 26.2% (2Q19/1Q24: ...

Equity Research Report Ganyuan Foods (002991 CH) Revenue Growth Slowed in 2024, 3Y Dividend Plan Announced Huatai ResearchInterim Results Review 14 August 2024 | China (Mainland)Food Qoq slowdown in 2Q24 due to off-season and personnel adjustments Ganyuan Foods' (Ganyuan) revenue/attributable net profit (NP)/recurring NP were RMB1,040/170/140mn for 1H24 (+26.1/+39.3/+40.0% yoy) and RMB460/80/60mn for 2Q24 (+4.9/+16.9/+13.6% yoy). In 2Q24, revenue fell during the off-season for snack sales. This, coupled wit ...

Equity Research Report Angel Yeast (600298 CH) 2024 Earnings Beat; Operating Performance Improved Qog Huatai ResearchInterim Results Review 13 August 2024 | China (Mainland)Food 2Q24 earnings beat; operating performance improved qoq Angel Yeast's 1H24 revenue/attributable NP/recurring attributable NP were RMB7,180/690/600mn (+6.9/+3.2/-2.5% yoy) and for 2Q24 were RMB3,700/370/ 300mn (up 11.3/17.3/7.3% yoy), beating our estimates (2Q24 revenue/attributable NP: up 8/6% yoy). For 1H24, domestic/overseas revenu ...

Equity Research Report Strategy Have H-Shares Bottomed Out? Huatai Research 13 August 2024 | China (Mainland) Weekly Analyst SAC No. S0570520060001_wangyi012893@htsc.com SFC No. BMQ373 +(86) 21 2897 2228 H-shares should have bottomed out on four positive factors H-shares saw increases amid volatility last week, supported by four factors: 1) the HSI short-selling ratio quickly fell from 20% to 13% later in the week, aiding the uptrend with short covering; 2) better-than-expected 1H24 earnings of leading phar ...

Equity Research Report By-health (300146 CH) Revenue Down on High Base, Profit Dented on Increased Expenses Huatai ResearchInterim Results Review 13 August 2024 | China (Mainland)Food Revenue slid on high base, profit constrained on increased expenses By-health's revenue/attributable net profit (NP)/recurring attributable NP were RMB4,610/890/830mn (-17.6/-42.3/-42.8% yoy) for 1H24 and RMB1,970/160/ 120mn (-20.9/-68.1/-73.5% yoy) for 2Q24. We attribute the temporary strain on earnings primarily to: 1) a hig ...

Equity Research Report Tasly Pharmaceutical (600535 CH) Mutual Empowerment of Tasly & CR Sanjiu, Eyeing Innovation Huatai ResearchEvent Comment 13 August 2024 | China (Mainland)Traditional Chinese Medicine Controlling shareholder transferring 28% of share capital to CR Sanjiu Tasly has announced that its controlling shareholder, Tasly Group, along with its concerted action partners, plans to transfer about 418mn shares (accounting for 28% of total share capital) to CR Sanjiu at a transfer price of c RMB6,21 ...

Equity Research Report Wens Foodstuffs (300498 CH) Rise in Meat Pig Selling Price Beat Average; Per-Head Profit Leading Huatai ResearchAnnouncement Comment 13 August 2024 | China (Mainland)Agribusiness Meat pig per-head profit neared RMB600 in July Wens Foodstuffs (Wens) saw sustained rises in pig and broiler output in July, with the selling price of meat pigs at RMB18.95/kg, above the industry average. We estimate its meat pig per-head profit at nearly RMB600. Given a potential contraction in hog supply in ...

Equity Research Report Economics Strong China export growth: merchandise trade or supply chain reconfiguration? Huatai Research 13 August 2024 | China (Mainland) In-depth In January-July 2024 (7M24), China's export value in USD terms rose by 4% yoy, and yoy growth in export value in RMB terms (6.7%) and that in export volume (c. 15%) notably outpaced that in domestic demand. Meanwhile, contributions made by external demand to GDP and corporate profit growth continued to increase on a high base last year, wi ...

Equity Research Report Macro Views Export Volume Growth Remained High in July Huatai Research 8 August 2024 | China (Mainland) Eva Yl Analyst SAC No. S0570520100005 SFC No. AMH263 evayi@htsc.com +(852) 3658 6000 Comment on China's trade data for July 2024 According to General Administration of Customs of China (GACC), for July 2024, China's yoy export growth in USD terms fell from 8.6% in June to 7%, falling below Bloomberg consensus estimate of 9.5%; yoy import growth in USD terms rallied from -2.3% in Jun ...