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00:00We're watching in particular for how Alibaba managed to weather the Covid disruptions, as well as, I guess, the strength of demand as we get those first couple of months after the reopening. Yeah. So I think in terms of delivery capacity, it has a normalized. So now I think what we are really looking forward to to the earnings announcement and management guidance is whether they will start to give guidance again for our full year revenue and their. There are mentions of how the recovery of consumption has been, we assure that as delivery has normalized, cancellation should have decreased. So that should help the take rate for Ali Baba. Another thing that I think we need to watch is obviously we see that GDP is now rolling out a daily based 10 billion subsidy program. So potentially that will drag. Ali Baba and PDT into more subsidies as well. What is really the renewed worries when it comes to Ali Baba and broad attack in China? Because for a while there it felt like there was things. Things were improving. Rather, regulatory crackdown seemed mostly over. Yeah, so, you know, e-commerce space, I think is the renewed worries of some kind of price war, which will really deals the margin of these companies. Obviously they will see some increase in their top line because basically you are subsidizing customers to buy more of your products, but then it will be at the expense of the margin. Recall that in the last few quarters we see really good cost cutting measures across the tech companies and the e-commerce companies. But I think there is a concern that now we're going backwards to the two to like a lower than expected margins. Where are the bright spots then? Well, I think the bright spot is management's sort of really like sorting out for investors, like how this strategy is going to be. Is it possible that the subsidy is actually not as large as they expect? And also, I think the strings in consumption recovery is very important. So. Or if governments like, for example, local government bonds are willing to roll out more supports in consumption. I think that will also be helpful. So I think we're looking forward to other large gasman meeting in March to see if there will be more specific government supportive measures. Who's doing well so far in positioning for the next fear of higher consumption and also potentially more government support? Well well, I think that when it comes to government support and they say if the economy accelerate faster and less employment sort of revert back to the normal level faster and people have a few good wealth effect than discretionary goods should see more demand and that should benefit. Ali Baba quite a lot because they actually have a big focus on apparel and like some of the discretionary items like like beauty products, for example, and also like it, they're cycling sumption upgrade story that it will also benefit Alibaba. On the other hand, it's interesting that so far we're still seeing PDB, a Kindle or doing really well with this valuable money strategy. It doesn't mean that it's like only selling cheap goods. It just means that, for example, for the same high quality brands you can buy at a cheaper price at PDT compared to maybe some of the other platform or perhaps online. And this is part at least partly due to a subsidy. So I think these two companies are doing quite well. Even if the economy is improving, it actually still makes sense for value for money. Platform like PDP to continue to do well because you always want to buy at the cheapest price for the product that you like and you want to buy also the cheapest stocks when you can. I think you have a buy target price for Ali 171. What are you saying in terms of valuations in the tech sector in China? Yeah, I think the valuation I mean, now with the news of us renews subsidies. I think there would be some pressure on the stock ahead of earnings. We're waiting for sort of the management to give more guidance on how they are going weather. For example, I will follow the subsidies and things like that. So I think there would be some concern. So that weight on multiples.

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Morningstar IM's Tam on Alibaba

Chelsey Tam, Senior Equity Analyst at Morningstar Investment Management Asia, discusses her outlook on Alibaba ahead of the company's latest earnings. She speaks with Haidi Stroud-Watts and Shery Ahn on "Daybreak Asia". (Source: Bloomberg)

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