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Speaker 1: Well, we saw Ali Baba shares or a d R

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Speaker 1: s rise in US trade. They had a pretty good

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Speaker 1: session in Hong Kong ahead of their earnings. But in

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Speaker 1: the US that was the reaction to better than expected

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Speaker 1: first quarter sales and earnings. Let's get more now with

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Speaker 1: Katherine Lamb, Senior analyst Consumer and Technology, who joins me

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Speaker 1: here in the Singapore studio. Shears, of course from Bloomberg Intelligence,

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Speaker 1: so better than expected despite the economic turmoil. And I

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Speaker 1: know that you're saying this is going to put a

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Speaker 1: lot of focus on the China tech pres to what

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Speaker 1: really struck out to you? Catherine? Right, Um, do you

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Speaker 1: know what what stood out from Ali Baba's result really

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Speaker 1: was that, you know, there is an increasing focus by

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Speaker 1: the company on profitability and it's actually interesting hearing the

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Speaker 1: company talk about wanting to narrow the lossest um. You

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Speaker 1: know for some of their businesses, the newer ones that

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Speaker 1: goes beyond their traditional um donal stronghold in Talbau or tea.

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Speaker 1: More new businesses such as grocery um as well in

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Speaker 1: in food delivery business that puts them um do you

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Speaker 1: know head to a hit with the lights of matuan Um.

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Speaker 1: You know, with them actually scaling back and wanting to

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Speaker 1: actually focus on more profitable services. UM. I do think

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Speaker 1: that that is actually good news in terms of the

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Speaker 1: competition that's actually ongoing within these UM specific segments, where

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Speaker 1: but we'll probably see the rivalry actually toned down a

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Speaker 1: little bit going into twenties three, and industry white margins

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Speaker 1: may actually be on the rise UM into next year.

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Speaker 1: It seems the competition is tough, but it doesn't seem

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Speaker 1: that there's anything really broken here. UM. The China commerce

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Speaker 1: number is probably about ten times the international commerce number,

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Speaker 1: so there's a lot of room to grow there for

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Speaker 1: international and and since the Chinese economy has been under

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Speaker 1: a lot of pressure to date, it would seem to

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Speaker 1: be getting better. Does that, UM, Does that sort of

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Speaker 1: set us in line for better numbers from Ali Baba

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Speaker 1: in the next quarter or two, right? UM, you know

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Speaker 1: you're right that currently the drag on Ali's Baba's numbers

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Speaker 1: will be from mainland China, whereby that continues to be

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Speaker 1: uncertainties both from a macro perspective that is actually affecting

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Speaker 1: the consumer sentiment underground. And we are already hearing from

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Speaker 1: UM not just Ali Baba yesterday but even ours is

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Speaker 1: also talking about being very cautious and July numbers, the

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Speaker 1: July traffic flows at physical store not really getting there

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Speaker 1: yet because you know, there is still real concerns on

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Speaker 1: COVID in China. Now moving to the international markets, UM,

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Speaker 1: it's a different set of problems that I would say

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Speaker 1: Ali Baba face because UM they are dealing with other

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Speaker 1: competitions UM in a different regulatory landscape. That probably makes

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Speaker 1: them more cautious in taking UM you know, proactive moves

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Speaker 1: in gaining market share in some of these places in Singapore,

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Speaker 1: in Southeast Asia, Lazada which go hits on with UM

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Speaker 1: shoppy from CEE. The good news that we can actually

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Speaker 1: take from that is that both companies that is UM,

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Speaker 1: Ali Baba as well as SEE they have both unanimously

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Speaker 1: UM you know, guided for greater focused on UM turning

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Speaker 1: their business around in this region. So again that's all

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Speaker 1: good for industry profitability UM definitely moving into next year.

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Speaker 1: There was an interesting comment coming through from divers Ton

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Speaker 1: Joy about Ali Baba saying that investors are under appreciating

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Speaker 1: some of the potential earnings upside on the cost control efforts.

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Speaker 1: Do you think we're going to continue to say some

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Speaker 1: I guess repricing here Morning Style also telling us yesterday

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Speaker 1: Ali Baba is undervalued, right. Um, you know, as Ali

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Speaker 1: Baba shifts their focused to profits from sales and top

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Speaker 1: line growth, which is in general and typically what most

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Speaker 1: of the you know, the tech investors look at. I

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Speaker 1: think it's going to take a little bit of adjustments, um,

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Speaker 1: you know, for for the market to understand that, you know,

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Speaker 1: the company is actually shifting and trying to monetize more

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Speaker 1: of their current penetration from the markets that they are in. UM.

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Speaker 1: Whether you know they will be able to actually gain

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Speaker 1: that traction, I think you need a couple, um, you know,

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Speaker 1: more quarters of deliveries, particularly you know, a more upbeat

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Speaker 1: sentiment coming from mainland China to really get an appreciation going.

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Speaker 1: We saw a pretty strong repurchase of shares in the

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Speaker 1: US American the A d R S. Is it likely

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Speaker 1: that we would see much more of that and could

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Speaker 1: that lift the start right? Well? Definitely? UM. You know,

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Speaker 1: Ali Baba is still committed to UM their share repurchase program. UM,

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Speaker 1: it may actually take a slower pace for the next

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Speaker 1: four or five months because of the primary listing that

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Speaker 1: they are seeking to upgrade two UM in Hong Kong.

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Speaker 1: But that's not going to actually change things. UM. It's

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Speaker 1: more from a you know, regulatory standpoints that just to

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Speaker 1: make sure that the primary listing goes smoothly by the

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Speaker 1: end of this year as they are targeting before they

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Speaker 1: actually do. UM more of the share by banks, Catherine,

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Speaker 1: what about or what did you RADI into that FT

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Speaker 1: report as well that UM soft Bank had sold Ali

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Speaker 1: Baba derivatives. Is that kind of massay or she's son

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Speaker 1: wanting to get out of this stock or is it

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Speaker 1: more about raising capital for soft Bank? Right? UM, I

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Speaker 1: think they ordered scrutiny on soft Bank. Just stick in

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Speaker 1: Ali Baba and UM you know when they will potentially

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Speaker 1: be actually UM. You know, lowering that stick has always

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Speaker 1: been a topic. That's UM, that's ongoing. Both companies have

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Speaker 1: had a very long relationship. UM. You know pre I

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Speaker 1: p O and I guess you know, given soft bench

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Speaker 1: structure and it's portfolio where it is, UM, like most

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Speaker 1: investors do. You know, I don't rule out the possibility

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Speaker 1: of a cell down UM, but of course you know,

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Speaker 1: it is the timing and the positive that I actually

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Speaker 1: do take from it is that you know, Ali Baba

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Speaker 1: UM as a company UM in its operations. UM, it

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Speaker 1: is very independent from soft Man's Steak. There's been some collaboration,

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Speaker 1: but again they are very independent in their operations. And

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Speaker 1: even if that happens, fundamentally, I don't see that having

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Speaker 1: a big impact on Ali Baba. Katherine, you mentioned that

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Speaker 1: with some cost cutting they can they can arrest some

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Speaker 1: of the declines in profitability in the coming year. Not

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Speaker 1: a day seems to go by where we don't see

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Speaker 1: stock prices going up because companies are are slashing costs.

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Speaker 1: So what's the area that Ali Baba can get the

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Speaker 1: most out of out of cutting cost right? UM, I

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Speaker 1: guess you know. One one of the numbers UM. You know,

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Speaker 1: two items that actually did stand out from yesterday was

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Speaker 1: really the sales and marketing expenses. We continue to actually

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Speaker 1: see that UM, you know, contracting UM as a percentage

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Speaker 1: of revenues, and really that is one of the easiest

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Speaker 1: cost um you know, component to actually tighten your reins

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Speaker 1: on because you know, with all the promotions that Ali

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Speaker 1: Baba UM you know, undertakes on its platforms, etcetera. UM,

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Speaker 1: that was when it was doing a more aggressive stunce

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Speaker 1: in wanting to grab market share from existing competitors. So

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Speaker 1: as it slows down on that, I think you know

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Speaker 1: you'll continue to see a contraction in that part of

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Speaker 1: the cost. But so precise with your words, excellent. Thank

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Speaker 1: you very much Catherine for joining us here this morning.

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Speaker 1: Very good explanation. Katherine Limbs, Senior Analysts, Consumer and Technology,

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Speaker 1: helping us understand better understand Ali Baba's earnings. This is

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Speaker 1: Bloomberg