The Zhitong Finance app learned that according to a research report released by SPDB International, it maintained the Taobo (06110) “buy” rating and industry preferences unchanged. Based on high-quality growth, strong performance certainty, and strong cash flow, the FY24 profit forecast remained unchanged, and the target price of HK$8.4 remained unchanged. The company's 3QFY24 pre-tax sales (including retail and wholesale) growth rate is basically in line with market expectations, but the bank believes that the extraordinary operating quality shown behind Taobo's sales growth is superior to market expectations. Against the backdrop of increased competition and uncertainty in the industry, Taobo 3QFY24's steady performance is expected to enhance market confidence in the company and have a positive effect on its short-term stock price performance.

The report mentioned that the bank predicts that adidas' continued recovery will continue to drive Taobo's same-store sales growth over the next 12 months. Meanwhile, the company's number of stores and total sales area returned to the expansion stage in 3QFY24. Considering that the company's retail discounts continued to improve year over year, the share of retail revenue continued to rise, and the impact of reduced brand subsidies gradually declined, the bank believes that Taobo FY24 is still expected to achieve a year-on-year expansion in gross margin. Based on Taobo's multi-brand business model, relatively high-end brand positioning, healthy inventory levels, and flexible operating capabilities, the bank believes that Taobo's medium- to long-term performance is more certain than that of its peers.