China e-commerce Immediate recovery not in sight

Research evidence excerpt

China e-commerce Immediate recovery not in sight

23 June 2026

Equities

Internet Software & Services China e-commerce

Immediate recovery not in sight China

◆ 618 growth decelerated further from 2025 Double 11, we trim Charlene Liu*

ecommerce toplines on weaker-than-expected 2Q26 results Head of Internet and Gaming Research, Asia Pacific The Hongkong and Shanghai Banking Corporation

Limited, Singapore Branch

◆ ‘Anti-involution’ regulatory focus could contain competition charlene.r.liu@hsbc.com.sg

+65 6658 0615

◆ We prefer BABA on AI, but cut TP to USD176 (from USD180), Charlotte Wei*

Analyst, Internet Research

and JD (TP unchanged) on earnings recovery, and lower The Hongkong and Shanghai Banking Corporation Limited

PDD’s TP to USD144 (from USD145) charlotte.wei@hsbc.com.hk+852 2996 6539

Comps may improve only in 4Q26, but correction may be overdone: Syntun data Lauren Cai*

Associate

suggests that this year’s 618 shopping festival e-commerce gross merchandise value Guangzhou

(GMV) growth slowed to 0.9% yoy from teens in 2025’s 618 & Double 11 festivals (Exhibit

2). However, with the exception of BABA, e-commerce valuations are c11% above the * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

Sept-24 valuation trough. Meaningfully easier comps will only come in 4Q26, but 3Q26 not registered/ qualified pursuant to FINRA regulations

should see slight improvements in growth versus 2Q, hence we think market sentiment

may be overly pessimistic. We trim 2026e e-commerce toplines to factor in a weaker-

than-expected 2Q, but our changes to earnings are muted given we expect better cost

and subsidy control, including losses narrowing in the food-delivery category. After

reflecting earnings changes, we cut BABA’s TP to USD176 (from USD180), and PDD’s