Alibaba (BABA)/ 9988 HK; Jack Ma 04 (Dec 23 - Dec 26)

[winston]

Alibaba Group (9988 HK / BABA US)

Recommendation : BUY
Fair Value : HKD 160.00 (9988 HK) / USD 164.50 (BABA US)

E-COMMERCE AND CLOUD EXECUTION ON TRACK

• Key drivers remain intact
• Sustainable Taobao Tmall Group (TTG) growth
• Cloud revenue to accelerate

Summary (9988 HK): Alibaba reported a mixed 4QFY25 results as revenue from Taobao Tmall Group (TTG) and Customer Management Revenue (CMR) came in ahead of expectations and rose 8% and 12% year-on-year (YoY) respectively.

Although Cloud revenue growth accelerated to 18% YoY in 4QFY25, it was still below investors’ elevated expectation of +20% YoY.

This, coupled with a sequential decline in cloud margin to 8% and CAPEX to CNY24.6b, have raised concerns about Alibaba’s artificial intelligence (AI) investments and its long-term growth potential, resulting in a 7.5% pullback in the American Depositary Shares (ADS) overnight.

Management remains committed in reinvesting in AI and reiterated the trend on AI adoption, which we believe should help ease investors’ concerns.

The investment thesis on Alibaba stays intact and the stock remains as one of our preferred plays in the internet and platform industry (alongside Tencent, 700 HK) given:
i) improving TTG momentum with domestic e-commerce market share stabilising; ii) riding on secular AI growth;
iii) benefitting from more consumer stimulus;
iv) Alibaba International Digital Commerce Group (AIDC) to achieve its first quarter of profitability in FY2026; and
v) ongoing focus on shareholder’s return.

Alibaba is China’s largest cloud hyperscaler with leading generative AI capabilities and a primary focus on external cloud.

We believe the company is well positioned to benefit from the broadening and an acceleration of AI adoption in China.

Our sum-of-the-parts (SOTP) fair value (FV) estimate is at HKD160.00 and implies 16x forward price-to-earnings (P/E).

The stock is currently trading at 11.6x forward P/E, which is close to -0.25 s.d. to historical average.

Source: OCBC

[winston]

vested

5 Reasons to Buy Alibaba Stock Like There's No Tomorrow

by Geoffrey Seiler

Alibaba is becoming an artificial intelligence leader in China.

Meanwhile, the turnaround of its e-commerce business is in full effect.

The stock remains cheap, and the company has opportunities in other areas too.

Source: The Motley Fool

https://finance.yahoo.com/news/5-reason ... 00946.html

[winston]

vested

<Research>Citi Keeps Buy on Alibaba (BABA.US); On-demand Delivery & Travel Services Confirmed as Core Biz

BABA-W (09988.HK) (BABA.US) recently announced a RMB50 billion subsidy plan for Taobao Instant Commerce, according to Citi's research report.

The subsidies are expected to be distributed to consumers and merchants over 12 months, though details of the measures haven't yet been provided.

However, it is believed that the actual financial impact on the group will be less than the total subsidy amount.

In Citi's opinion, the large-scale subsidies reflect the management's satisfaction with the initial results of Taobao Instant Commerce achieving 60 million orders within two months of launch.

By integrating Ele.me and Fliggy into its China retail business, Alibaba has established the importance of on-demand delivery and travel services as core e-commerce business developments.

Anticipating cross-selling benefits between Taobao's core users and instant retail, Citi kept a Buy rating for Alibaba with a target price of USD169.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

<Research>G Sachs Cuts BABA-W's TP to HKD146, Chops Earnings Forecasts on Increased Investment in Food Delivery & Instant Shopping

Alibaba (BABA.US) has already fallen by 16% over the past month, according to a report from Goldman Sachs.

The broker summarized investors' main concerns regarding:
(1) the strategic restructuring of Ele.me and Fliggy into the China e-commerce business group;
(2) the latest developments in Taobao Instant Commerce and the competitive landscape of instant retail; and
(3) Alibaba's performance during the 618 shopping festival.

Considering its vigorous business momentum but increased investment in its food delivery and instant retail businesses, Goldman Sachs lowered its FY26-28 EPS forecasts for Alibaba by 4-13%, while raising its FY26-28 revenue forecasts by 2-4%.

The broker cut its target price for Alibaba's US shares from USD159 to USD150 and for its H-shares from HKD154 to HKD146, with a Buy rating remaining in place.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Accelerating subsidies for instant delivery

Alibaba announced on 2 Jul that it would be spending Rmb50bn on subsidies for its instant delivery business over the next 12 months.

Based on its newly announced daily order volume of 60m for instant delivery, we forecast related losses at Rmb6.9bn/Rmb40bn for 1QFY26F/FY26F.

However, we expect its Taobao and Tmall CMR growth to be strong at 8%/6% yoy for 1QFY26F/FY26F, due to better take-rate and home appliances trade-in policy.

Reiterate Add, with a lower DCF-based TP of HK$153. We remove Alibaba from our High Conviction list.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... F31E6BEE37

[winston]

not vested

<Research>CLSA Expects On-demand Investment to Dent BABA-W 1FQ Adj. EBITA by 16.3% YoY

(BABA.US) was expected to see its revenue growth slow to 2.4% YoY for 1FQ ending in June, CLSA said in its report, attributing this to the deconsolidation of SUNART RETAIL (06808.HK) and Intime.

Stripping off these factors, revenue was expected to grow by about 10%, with Taobao Tmall CMR expected to grow steadily by about 10% and international retail and cloud business revenues expected to gain by approximately 20% and 22%, respectively.

The broker estimated that the group's on-demand investment of approximately RMB10 billion will dent the 1FQ's adjusted EBITA down by 16.3% YoY to RMB37.7 billion, with the margin predicted to narrow by 3.4 ppts to 15.1%.

The impact on the 2FQ could be even greater.

CLSA lowered Alibaba's adjusted net profit forecast for FY2026 by 25%, reduced the target price for U.S. stocks from USD165 to USD155, and downgraded the stock from High-Conviction Outperform to Outperform.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

<Research>CLSA Downgrades Alibaba (BABA.US) to Outperform; 2026E Adj. NP Cut by 25%

CLSA released a research report, covering BABA-W (09988.HK) (BABA.US), which was projected to log a slowdown in YoY revenue growth to 2.4% for 1FQ ending in June, in wake of the deconsolidation of SUNART RETAIL (06808.HK) and Intime.

Discounting these factors, the group's revenue was expected to grow by about 10%, driven mainly by a solid 10% growth in TTG (Taobao and Tmall Group)'s CMR, a 20% increase in international retail, and a 22% growth in cloud.

CLSA anticipated that Alibaba's instant retail losses may further expand in 2FQ ending in September, leading to a 25% reduction in the adjusted net profit forecast for FY2026.

The target price for US shares was trimmed from USD165 to USD155, and the rating was downgraded from High-Conviction Outperform to Outperform.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

<Foresight>Brokers Expect BABA-W's 1FQ Adj. NP to Dive 15%+ YoY; Food Delivery Competition & AI Investment Take Center Stage

BABA-W (09988.HK) is set to announce its 1FQ results for FY26 ended June 2025 this Friday (29th).

According to the forecasts from seven brokers as summarized by our reporters, BABA-W's 1QFY26 non-GAAP net profit is expected to reach RMB32.119-36.245 billion, compared to RMB44.922 billion in the same period last year, representing a YoY change from a 22.5% decline to a 1.5% increase.

The median of RMB34.4 billion marks a YoY drop of 15.5%.

Investors will be eyeing the latest operational guidance from BABA-W's management, growth momentum in AI cloud computing, progress in the AI Agent program, specifics of recent investments like AI capital expenditure as well as food delivery and instant retail operating expenses, and the duration of food delivery subsidies, among others.

Broker | 1QFY26 Non-GAAP NP Forecast (RMB) | YoY Change
Morgan Stanley | 36.245 billion | -10.9%
Shenwan Hongyuan | 36 billion | -11.5%
UBS | 35.576 billion | -12.6%
CCBI | 34.398 billion | -15.5%
BOCOMI | 34.135 billion | -16.1%
CLSA | 32.371 billion | -20.4%
Citi | 32.119 billion | -21.1%

Calculated on BABA-W's 1QFY24 non-GAAP net profit of RMB40.691 billion.

Source; AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Alibaba stock jumps as AI-driven cloud acceleration offsets Q2 results miss

by Vahid Karaahmetovic

Alibaba posted earnings of 14.75 yuan per share, missing analyst estimates of 15.47 yuan.

Revenue came in at 247.7 billion yuan below the consensus forecast of 253.8 billion.

Excluding those investment gains, profit would have fallen 18% from a year earlier.

Cloud computing: Revenue rising 26% to 33.4 billion yuan, accelerating from 18% growth in the prior quarter. Also posted a 26% increase in adjusted EBITA.

Alibaba’s main e-commerce division generates over half of total revenue. Revenue climbed 10% to 19.6 billion yuan.

Source: investing.com

https://www.investing.com/news/earnings ... er-4216116

[winston]

vested

Alibaba, Stock Of The Day, Surges Above Buy Point After Earnings, AI Chip Report

Earned an adjusted 14.75 yuan per American depositary share for the June-ended quarter, down 10% from a year earlier. That beat the 14.16 yuan per ADS,

Sales increased 2% to 247.65 billion yuan, or $34.6 billion, below analyst estimates of 251.45 billion yuan, or $35.15 billion.

Alibaba's Cloud Intelligence revenue increased a stronger-than-expected 26% to 33.3 billion yuan.

The Wall Street Journal reported early Friday that Alibaba is testing a new custom computing chip designed for a broad range of AI tasks amid curbs on Nvidia (NVDA) chips in China.

International commerce division's "19% growth and approach to break-even demonstrate effective international execution."

Source: IBD

https://www.investors.com/research/ibd- ... src=A00220