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S&P Forecasts BABA-W to See EBITDA Drop by ~Third This Yr, Contribution from Quick Commerce to Grow
Recommend 32 Positive 55 Negative 38 |
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Rating agency S&P Global posted a statement this morning (25th) prior to the State Administration for Market Regulation (SAMR)’s official website reposting the commentary titled "The Food Delivery War Should End" saying that BABA-W (09988.HK)'s market share battle with MEITUAN-W (03690.HK) will be costly, and estimating BABA-W’s EBITDA to fall by nearly a third this year, as both companies keep spending heavily on sales promotions in the quick commerce segment. S&P Global rated BABA-W at 'A+' credit rating, with Stable outlook. BABA-W is prioritizing user acquisition through subsidies, focusing on increasing order value and purchase frequency, S&P noted. However, unit economics are improving as the more intense phase of price subsidies peaked last summer and the company will benefit from efficiency gains because it has established a meaningful scale. S&P expected quick commerce would become a material contributor over time. It already makes up some 10-15% of the group’s e-commerce revenue, and by its estimates, will likely become profitable by FY2029 (ending March 2029). AAStocks Financial News Website: www.aastocks.com |
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