CITIC International: Maintains Alibaba-W Hong Kong stock target price at HKD 200.7 with a rating of "Outperform the Market"
Jianyin International released a research report stating that it maintains Alibaba (09988, target price HKD 200.7) and also maintains its target price for the US stock, both rated as "outperforming the market." Jianyin International believes that Alibaba's cloud growth visibility is good, mainly benefiting from strong AI demand and its commitment to AI capital expenditures. Despite increased investments, the firm expects the company's adjusted EBITDA profit margin for its cloud business to remain stable at 8.8% quarter-on-quarter in the September quarter. The firm anticipates a faster year-on-year revenue growth of 3.5% to RMB 254 billion in the September quarter, mainly benefiting from accelerated growth in Customer Management Revenue (CMR) to 30%. The firm's revenue forecast for the company is 0.6% higher than the institutional consensus. In terms of profits, given the company's aggressive investments in Quick Commerce (QC) and AI, as well as in Chinese e-commerce and other businesses, the adjusted net profit decline exceeded the firm's previous expectations. Increased investments may impact short-term profitability but will keep Alibaba well-positioned to seize structural AI opportunities and achieve synergies between Alibaba and its major market businesses, thereby consolidating its long-term growth objectives
According to Zhitong Finance APP, Jianyin International released a research report stating that it maintains Alibaba's (09988, BABA.US) target price for Hong Kong stocks at HKD 200.7, and also maintains its target price for US stocks, both of which are rated "outperform." Jianyin International believes that Alibaba's cloud growth visibility is good, mainly benefiting from strong AI demand and its commitment to AI capital expenditures. Despite increased investment, the bank expects the company's adjusted EBITDA margin for cloud business to remain stable at 8.8% quarter-on-quarter in the September quarter.
The bank expects a faster year-on-year revenue growth of 3.5% to RMB 254 billion in the September quarter, mainly benefiting from accelerated growth in Customer Management Revenue (CMR) to 30%. The bank's revenue forecast for the company is 0.6% higher than the institutional consensus. In terms of profits, given the company's aggressive investments in Quick Commerce (QC) and AI, as well as in Chinese e-commerce and other businesses, the adjusted net profit decline exceeded the bank's previous expectations. Increased investment may impact short-term profitability, but it will keep Alibaba well-positioned to seize structural AI opportunities and achieve synergies between Alibaba and its major market businesses, thereby consolidating its long-term growth objectives
