According to Bocom Intl's report, the mainland's online retail sales in August increased by 4.1% year-on-year after adjustment, compared to 8.1% and 6.4% growth in July and the second quarter, respectively. In terms of categories, the trends in food, daily necessities, and cosmetics remained consistent with July. The start of the school year drove double-digit growth in communication equipment, while household appliances benefited from the subsidy for replacing old appliances, and the growth rate of sports and entertainment products/furniture slowed down. China Post predicts that express delivery volume in August will increase by approximately 19% year-on-year, driven by the Qixi Festival and the start of the school season, which increased the demand for mailing.
Looking ahead, for Alibaba (09988.HK), the market share of its subsidiary Taotian remains stable. The bank expects the GMV in the September quarter to increase by high single digits in sync with the large cap. Consideration of the gradual realization of the effectiveness of the site-wide promotion and the collection of technical service fees from Taobao/Xianyu merchants starting in September will continue to be promoted in the coming quarters. The second is PDD Holdings (PDD.US). The bank determines that the mainland's e-commerce platform with high cost-performance ratio has a solid customer base, and the GMV growth rate will still lead the large cap, although the monetization rate may fluctuate between quarters due to the ecological governance strategy. The third is JD.com (09618.HK), which is expected to see an improvement in sales of refurbished products driven by the subsidy for replacing old appliances, achieving high single-digit growth in GMV in the third quarter. The continuous improvement of the supply chain capabilities will bring about the optimization of profits. The fourth is Kuaishou (01024.HK), whose GMV growth rate is expected to slow down to 15% in the third quarter due to continued negative impacts from competition.
In terms of investment insights, Bocom Intl points out that the profits of mainland e-commerce companies in the second quarter exceeded market expectations, benefiting from effective cost control and the improvement of the platform's monetization rate better than expected. The current prices correspond to the projected P/E ratios for 2024, with Alibaba at 9.7 times, JD.com at 7 times, PDD Holdings at 6.7 times, and Kuaishou at 8.5 times, indicating relatively low valuations. Alibaba may benefit from the Hong Kong Stock Connect and improved monetization capabilities, JD.com will continue to optimize its profits, PDD Holdings may continue to gain market share, but the monetization rate may fluctuate between quarters, leading to stock price volatility, and Kuaishou's short-term GMV growth rate may be under pressure, but there is still potential for user penetration.
