Zhitong Finance App learned that on October 18, Taobo (06110) announced its interim results for the six months ended August 31, 2023. The group achieved revenue of 14.177 billion yuan during the period, an increase of 7.25% over the previous year; profit attributable to shareholders was 1,337 billion yuan, an increase of 16.75% over the previous year. In the secondary market, Taobo continued yesterday's gains. As of press release, the reverse market rise was 1.82% to HK$6.17.

Since this year, the domestic retail environment has gradually picked up, sporting goods consumption has begun to unleash vitality, and the offline and online scenarios of aggressive retail business have shown a simultaneous recovery trend. Judging from retail data, the company's retail business revenue increased 8.8% year on year to 11.988 billion yuan.

At the same time, in the face of the increasingly competitive sports footwear and apparel market, Taobo chose to follow the “selection+optimization” approach and focus on improving overall store efficiency. By the end of August this year, the number of Taobo stores had shrunk to 6,209, a decrease of 1,797 in two and a half years. However, the sales area of a single store increased by 7.7% year-on-year. Among them, the single store area of main and non-main brands, as well as stores of different sizes, has increased.

Furthermore,Benefiting from the performance recovery of the two largest customers, Nike and Adidas, Taobo's revenue resumed growth in the first half of the year. According to previous financial reports, the “main brands” segment, where the two giants Nike and Adidas are located, accounted for more than 80% of total revenue.

According to the latest financial reports of the two brands, Nike achieved revenue of 12.9 billion US dollars (about 94.189 billion yuan) in the first quarter of fiscal year 2024, an increase of 2% over the previous year.Nike's revenue in Greater China was US$1,735 million (approximately RMB 12.668 billion), an increase of 12% year-on-year on the basis of an unchanged exchange rate, achieving four consecutive quarters of positive growth and two consecutive quarters of double-digit growth.Adidas's Greater China region has also returned to growth. Brand Greater China's revenue for the second quarter of this year was 766 million euros, an increase of 16.4% over the previous year, higher than expected.

UBS released a research report on October 20, saying that Taobo's interim results up to the end of August this year were generally in line with expectations. Revenue rose 7.3% year-on-year to 14.177 billion yuan, 1% lower than the bank's forecast, and net profit increased 16.7% year-on-year to 1,337 billion yuan, 2% higher than the bank's forecast. Management maintained guidelines for the whole year. Revenue growth was similar to that of the industry, while profit growth and gross margin were better than those in the industry, mainly due to healthy discount levels and benefits from operating leverage.

On the same day, Goldman Sachs released a research report saying that in the first half of Taobo's 2024 fiscal year, all brands showed an upward trend, and retail discounts all increased compared to the same period last year. The group expects order growth to accelerate next year. Considering the results for the first half of fiscal year 2024, the bank raised its net profit forecast for fiscal year 2024 by 3% and maintained its “buy” rating.