The company's recent situation
Recently, we were invited to attend the company's communication meeting. At the conference, the company gave a detailed introduction to Alibaba's commercial layout in the near and far markets, as well as specific initiatives to support merchants and serve consumers across multiple business scenarios.
reviews
From point empowering to global growth. 1) Global marketing: The company's service to corporate customers is upgraded to global marketing. In terms of marketing channels, it is divided into different scenarios according to consumer demand. Using Tmall and Tmall supermarkets in the far and middle market, are you hungry nearby, Hema, Taoxianda, Da Runfa, and TaoCai, which have sunk in the market, helped leading and up-and-coming brands keenly understand new consumer trends and help brands achieve business growth with Sang Cainiao's multi-level execution ability; 2) Digital transformation: Alibaba also digitized the e-commerce operation experience accumulated over many years into products, from Alibaba Cloud and Dingyun Dingying and Ling Yang support the completion of the enterprise Digital transformation to adapt to the working methods and organizational structures of the digital age. Currently, Alibaba has teamed up with leading brands to take the lead in the FMCG, food and beverage, beauty, automobile and other industries, and is gradually replicated in various segments.
After the epidemic, midmarket commerce was repositioned to complete the consumption landscape in the remote, middle and near markets. Midmarket commerce uses the city as the fulcrum to build an urban warehouse network structure. On the one hand, it can provide more SKUs and supplementary goods to nearby e-commerce, and can also be used as a transit point for the same city, express delivery, flash delivery, etc., forming a good complement to the near-field and far-field business formats. We believe that adding new retail from Alibaba to form a complete commercial landscape in the far, middle, and near markets will bring consumers a better experience, give merchants richer channels and ability to fulfill contracts, and help businesses operate.
Supply chains and compliance capabilities were further strengthened after the pandemic. During the Shanghai epidemic, businesses such as Da Runfa, Are You Hungry, Hema, and Tmall supermarkets actively assumed social responsibility, using their accumulated digital capabilities and ability to fulfill contracts to ensure the supply of materials and people's livelihood. Alibaba will further consolidate the supply chain, fulfillment, and digital capabilities developed during the pandemic, use various business formats such as integrated warehouses and front warehouses to improve contract fulfillment efficiency, and try to open up logistics systems for storage units such as stores, factories, dealers, and warehouses to reduce inventory levels and enhance the consumer experience. During this 618 period, Ali tried to connect the Tmall system, the merchant inventory system, and the delivery warehouse system, and realized that the entire link between the consumer side, the store side, and the warehouse side could be tracked and digitized, and the integration from traffic to supply fulfillment was realized more accurately.
Profit forecasting and valuation
Currently, the company's US stocks are traded at FY2023/FY2024 non-GAAP price-earnings ratios of 16 times and 13 times, and Hong Kong stocks 16 times and 12 times. We maintain our revenue and profit forecasts for FY2023 and FY2024, maintain outperform industry ratings, and maintain our SOTP target price of $140 (FY2023/FY2024 price-earnings ratio 19 times and 15 times, 21% room for increase) and 137 Hong Kong dollars (FY2023/FY2024 price-earnings ratio 19 times and 15 times, room for 22% increase).
risks
The impact of the COVID-19 pandemic; weak macro-consumption; increased e-commerce competition; regulatory uncertainty.