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Alibaba Group Holding Ltd ADR BABA

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Unblocking Visits to External Links on Weixin Can Be Both Good and Bad for Tencent and Alibaba

Chelsey Tam Senior Equity Analyst

Analyst Note

| Chelsey Tam |

The Ministry of Industry and Information Technology is reported to have had a meeting with Internet platforms such as Tencent, Alibaba, Bytedance, Baidu, and NetEase regarding three compliance standards, surrounding the unblocking of visits to external links in instant communication software. The deadline for implementation is reported to be Sept. 17. If the platforms do not implement these standards before the deadline, relevant departments will take action such as supervision, and removing the app from app stores. Tencent said it will embrace the requirements on a step-by-step basis under the premise of safety and security. We maintain our fair value estimates for Tencent and Alibaba, as there are both pros and cons in opening up.

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Company Profile

Business Description

Alibaba is the world's largest online and mobile commerce company, measured by GMV (CNY 6.6 trillion/USD 1 trillion for the fiscal year ended March 2020). It operates China's most-visited online marketplaces, including Taobao (consumer-to-consumer) and Tmall (business-to-consumer). Alibaba's China commerce retail division accounted for 69% of revenue in the December 2020 quarter, with Taobao generating revenue through advertising and other merchant data services and Tmall deriving revenue from commission fees. Additional revenue sources include China commerce wholesales (2%), international retail/wholesale marketplaces (5%/2%), cloud computing (7%), digital media and entertainment platforms (4%), Cainiao logistics services (5%), and innovation initiatives/other (2%).

969 West Wen Yi Road, Yu Hang District
Hangzhou, 311121, China, People's Republic of
T +86 57185022088
Sector Consumer Cyclical
Industry Internet Retail
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees 254,702