[ET Net News Agency, 11 February 2020] Alibaba Group (09988) yesterday announced a slew
of supporting measures for its merchants to help them survive the immense operational
challenges caused by the coronavirus.
Nomura believes the measures are aimed at showing solidarity with the central government
which is calling for support from local governments for small-and-medium businesses that
are severely affected by the epidemic and are more vulnerable than big enterprises to any
shock wave.
The research house said this ad hoc supporting measures would have minimal impact on
Alibaba's financials. However, they could help reduce the operational pressure on those
small merchants at the bottom of the pyramid in Alibaba's ecosystem. Nomura estimated the
combined platform annual fee and Wangpu likely account for close to 1% and 1.5% of revenue
and EBITA, respectively, from Alibaba's China marketplace business that mainly includes
Taobao and Tmall.
It maintained its "buy" call on Alibaba, with a target price of US$261 for ADR, or
HK$253 for the HK-listed share. (KL)