What's going on?

Alibaba reported a trove of glittering results on Thursday.

What does this mean?

It’s not for nothing that Alibaba’s market value is currently around $600 billion lower than its 2020 peak: since then, the Chinese government’s been on a tech-sector crackdown, and oversaw a few years of economy-hitting lockdowns. But China’s eased up on both those fronts lately, and things are looking up for Alibaba too. Admittedly, the company’s biggest segment, its commerce division, brought in 1% less revenue than last year – but it still managed to better the retail sales dropoff in the country at large last quarter. What’s more, the firm’s international segment actually increased its revenue, keeping overall revenue growth in the green. With some deep cost cuts also helping out last quarter, profit came in 69% higher than at the same time last year – and lovestruck investors sent shares up 6%.

Why should I care?

The bigger picture: Overcoming obstacles.
Analysts are betting that Alibaba’s revenue growth will gather momentum as the effects of China’s reopening ripple through the economy – but it’s worth remembering the firm still faces some obstacles. For one, Chinese internet giants like JD.com and Pinduoduo have been upping their competitive efforts ever since the tech crackdown eased up. And for another, getting Alibaba’s cloud segment back on track will be no mean feat. Analysts at Morgan Stanley believe in the company, though – naming it their top pick in the Chinese tech sector for the first time in three years this week.

For markets: Enamored managers.
Fund managers aren’t hesitating to buy into China. A recent survey of some high-rollers – who manage $763 billion in total – showed that buying Chinese stocks was their most popular trade for the first time in the survey’s 38-year history. And they might have still more to rise: a key valuation metric suggests the Chinese stock market’s still cheaper than wider emerging markets, even though its earnings growth forecast is much higher.