M Stanley: Order of Preference for CN E-commerce Sector in Bull Case Scenario Is PDD, JD, Alibaba
China's debt, demographic and deflationary issues remain difficult, especially the cycle of debt and deflation remains problematic, with the poor performance of consumption stimulus measures, Morgan Stanley released a research report saying.
Morgan Stanley believed that the e-commerce sector in China will still face much uncertainties in the next 2 years as the rebound in the China market has passed. Consumer confidence may take longer to recover due to the lack of strong consumption stimulus.
On the other hand, sales in September and October were boosted by the home appliance trade-in policy, meaning consumer confidence is more resilient than expected.
In the bull case scenario, the broker forecasted the e-commerce sector to grow 14%/ 13% YoY in 2025/ 2026. Assuming more consumption-related stimulus measures in China (e.g. extension of the trade-in policy to 2025/26), which will not only drive e-commerce demand but also ease competition among e-commerce players.
Morgan Stanley's order of preference was $PDD Holdings (PDD.US)$ , $JD.com (JD.US)$ and $Alibaba (BABA.US)$ .
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