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00:00These results your initial thoughts. Good bad. Just OK. I think the top line from being flattish is kind of expected by the market because as you know there were really drastic lockdowns in China back in April and May. But what's really surprising. I think it was a bit upbeat and that came in about 20 percent higher and consensus. I think the company had previously indicated that it was going to focus on costs but it probably surprised the market with the extent of the leverage that it can deliver in terms of squeezing its cost and delivering a stronger bottom line. And obviously this will have positive implications for the rest of the sector and for the rest of the financial year filed by those well. But there's still a lot of lingering uncertainty obviously. I just wonder what do you see as the trajectory of of the recovery story for all the above now. I think the the consumption recovery has rebounded somewhat in June and in July with the removal of the Covid restrictions that we saw earlier on. I think in the second half of a potentially consumption can improve even further as the government steps forward with more fiscal stimulus and more macro easing and really a competitor. We've lost this easier BS. We should start to see some growth coming through. But more importantly for Alibaba really it's how they can optimize their cost structure and streamline some of their loss making businesses like top all deals like toll titanium like the like toenail and you cool for example. So we should see a much more positive profit growth in the second half. And that I think is going to be a strong catalyst for the stock and those various units face or an. I mean would you say longer term a three to five years would those still be sort of just complementary units or at some point when they do become profitable really become the main engines of growth here for the company. Yeah I think at the end of the day Alibaba is going to be very focused on its core business which is delivering goods and services to to consumers from merchants and really told to stay top out deals and local services. MA That even you who all are complementary to this core mission to make it easier to do business for. For merchants I think longer term deals will become more of a growth driver than the current existing core e-commerce business because they tend to be able to address the more under penetrated parts of China like the more rural areas. I think it seemed like the street was just so surprised by Alibaba ISE cost cutting efforts and how efficient it has become. I have to wonder can I expect then that the stem the margin declines won't I expect margins to improve. Yeah I think going forward in the next couple of quarters we should see margins continue to improve on the back of this cost cutting costs focus on cost optimization. I think it's important to realize that a lot of the margin decline that we've seen in the past year or in the past couple of quarters are actually self-inflicted because they decided to embark on all these initiatives to expand our addressable market by going forward especially with the new kind of regulatory environment where competitive subsidies are not really encouraged. Branching out into non core businesses it's not really encouraged. We should see a lot of that spending come down and really help the margins going forward. Mason Just give us your sense of where revenue growth is going to be a profit growth that's focused in sales growth because that's where you saw that contraction there. What does sales growth look like moving forward 3 to five years. Is it going to be mid single digits high. Do we get back to double digits. I just want to get a sense of how quickly this company can grow again. I think a longer term being Alibaba which is the most dominant marketplace in China we have almost everybody in China using it. It's going to grow in the long term along with the Chinese consumption market which back in the day used to be mid single digit and online consumption probably equals that to high single digit or around low teens level. In the long run.

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UBP Senior Equity Advisor Vey-Sern Ling on Alibaba

Vey-Sern Ling, Asia Technology Senior Equity Advisor at UBP, reacts to the better-than-expected earnings from Alibaba. He speaks with Yvonne Man and David Ingles on "Bloomberg Markets: China Open". (Source: Bloomberg)

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