The Zhitong Finance App learned that Taobo (06110) fell more than 7% in early trading. As of press release, it was down 5.83% to HK$5.17, with a turnover of HK$57.4037 million.
According to the news, Taobo announced its annual results for the year ended February 29, 2024, with revenue of RMB 28.933 billion, up 6.9% year on year; profit attributable to the company's equity holders was RMB 2,213 billion, up 20.5% year on year. Bank of America Securities previously stated that it would lower Taobo's earnings per share forecast for the 2024 and 2025 fiscal years by 8% and 7%, respectively. It is mainly based on factors such as lower revenue assumptions due to the restructuring of its Neo stores and lower than expected traffic recovery speed.
According to a report published by UBS, Taobo's profit for the 2024 fiscal year was weaker than expected. Net profit for the second half of the fiscal year ending at the end of February this year increased 27% year-on-year, 7% lower than the bank's forecast. The reason was that revenue, gross margin, and operating expenses did not meet expectations, but were partially offset by lower tax rates. Due to the high base effect from January to February, revenue for the second half of the 2024 fiscal year increased 7% year-on-year, 3% lower than the bank's forecast. According to UBS, the earnings forecast per share for the 2024-2027 fiscal year was lowered by 3% to 4% due to lower earnings expectations for the 2024 fiscal year and weak recent sales trends. The target price was reduced from 7.5 yuan to 7.3 yuan, and the rating was “buy”.