There are reports that China will cancel the tax preferential policies for software companies. Currently, the news has not been officially reported yet, but according to past practice, usually there will be some preliminary indications.
Personally, I believe that canceling the tax incentives is reasonable, after all, preferential policies are meant to support small and medium-sized enterprises. Alibaba and Tencent are already international giants and should contribute more to society.
The standard corporate income tax rate is 25%, the tax rate for high-tech enterprises meeting the standards is 15%, and the tax rate for key software enterprises meeting the standards is 10%.
Currently, alibaba, tencent, and xiaomi all qualify as key software companies, while meituan qualifies as a high-tech enterprise. How significant is the impact?
The above chart shows the tax item data disclosed in alibaba's 2021 annual report. The income tax expense for the 2021 fiscal year was 29.278 billion yuan, with the impact amount of 20.675 billion yuan from tax-exempt periods and tax incentive policies for subsidiaries.
If the incentives are removed and the tax rate is restored to 25%, the impact on alibaba would be over 20 billion, accounting for more than 10% of the net income ratio. Alibaba's net income growth rate for the 2022 fiscal year may turn negative.
Fiscal year 2021: 1st quarter of 2020 - 1st quarter of 2021.
1) The impact on Tencent is as follows:
2) The impact on Meituan is as follows:
3) The impact on Xiaomi:
Apart from Alibaba, the impact of others is not very significant. The smallest impact is on Meituan, and yet Meituan's stock price has fallen the most. This indicates that emotional impact outweighs substantive impact.
Actually, whether it's taxation or restrictions on expansion, these bearish factors not only...