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

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BABA(9988)

Analysis：

According to its FY2024Q4 (corresponding to 2024Q1) result, the Company reported a revenue of 211.9 billion yuan (Yoy+7%), a net profit of 919 million yuan, and Non-GAAP net profit of 24.418 billion yuan, a yoy decrease of 11%, mainly due to increased investment in Taotian, International Business, and Cainiao.

During the 618 period, Taotian GVM saw a yoy growth of 10%-15% and a market share of 42%, indicating initial effectiveness of the transformation strategy.

The Company`s repurchase and dividend ratio continues, and the completion of its dual major listing in Hong Kong in August can help increase its liquidity.

Strategy：
Buy-in Price: $71.81, Target Price: $78.18, Cut Loss Price: $68.50

Source: Phillips

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<Research>JPM Foresees BABA-SW (09988.HK) Shr Price to Range Bound Next 3-6 Mths

BABA-SW (09988.HK)'s share price has been in line with the peer average over the past 3 months, and its valuation has been re-assessed by the market due to improvements in related factors, including higher scale of shareholder returns, possible inclusion in the Hong Kong Stock Connect in September, and a positive Beta coefficient, according to a report by JPMorgan.

The broker believed BABA's share price is not currently reflecting improved fundamentals, particularly in the local e-commerce sector, and considered the risk-reward profile of the stock attractive, with the potential for a positive earnings surprise in the next few quarters.

Related News: Jefferies Lifts BABA-SW (09988.HK) TP to $112 as 3-yr Strategic Goals Unchanged

The broker forecasted the group's total 1FQ25 revenue to grow 7.6% YoY to RMB252 billion, with an estimated EPS of RMB15.6, broadly in line with consensus expectations.

Loss from new business may be lower than expected, with the possibility of higher earnings.

JPM expected BABA's share price to remain range-bound in the next 3-6 months, as it may still face financial uncertainty in the early part of the investment cycle, but it has upside potential in the coming 6-12 months.

The broker rated the group Overweight with a target price of $95.

Related News: M Stanley Expects Alibaba (BABA.US) 1FQ Rev. to Hike 6.3% YoY, Adj. EBITA to Fall 5.4% to RMB42.9B

Source; AAStocks Financial News

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

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<Research>Nomura Projects Alibaba (BABA.US) Qtr Results Roughly In Line; Rating Buy

Nomura released a research report, expecting Alibaba (BABA.US) to report 1QFY25F results ending June that will be largely in line.

CMR for the period was forecast to rise 2.8% YoY to RMB81.9 billion, in line with the market consensus.

Its total GMV from Taobao and Tmall may hike 8% YoY, mainly due to Taobao's transformation, which became more focused on product value for value-for-money products and price competitiveness.

Therefore, the broker projected that Alibaba's e-commerce monetization may be impacted in the current quarter, because Taobao merchants do not need to pay commissions and generally spend less on marketing than Tmall merchants.

Nomura expected Alibaba's consolidated revenue for 1QFY25F to gain by 7% YoY to RMB251 billion, roughly in line with the market expectation of RMB250 billion.

EBITA may decline by 6% YoY to RMB43 billion, broadly in line with consensus.

The broker maintained its target price on Alibaba US shares at USD101 with Buy rating.

Source: AAStocks Financial News

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

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<Research>Haitong Int'l Sees Steady Improvement in Alibaba (BABA.US) Core Biz in Last FQ, Keeps Rating Outperform

Haitong International released a research report expecting that Alibaba Group Holding Limited (BABA.US) 's 2Q24 total revenue will be RMB249.7 billion, up 6% YoY, in line with market consensus.

It is expected that customer management revenue will rise 3% YoY to RMB82.1 billion, while Alibaba International Digital Commerce Group (AIDC) will continue to record strong growth of 28.2% YoY at RMB28.4 billion in 2Q24.

Related News: UBS: Alibaba (BABA.US) Accelerates Buybacks to Back Stock Price when It Falls

The cloud business is on track to reach double-digit growth in 2HFY2025, Haitong International added.

Haitong International kept its target price at US$88 and rating at Outperform on the Company.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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<Research>TF Securities Expects BABA-SW (09988.HK)'s 1FQ Non-GAAP NP to Fall 6% YoY, Dual Listing Conversion to be Completed in Aug

TF Securities released a report, forecasting BABA-SW (09988.HK) to deliver:-
1. Revenue of RMB248.8 billion in 1QFY25, a YoY growth of 6.2%;
2. Adjusted EBITA of RMB40.5 billion, a YoY drop of 10.8% ;
3. EBITA margin of 16.3%; and
4. Non-GAAP net profit of RMB42.1 billion, a YoY slip of 6%.

The broker expected:-
1. Alibaba's Taobao and Tmall Group to record revenue increase of 2.8% YoY in 1FQ;
2. Alibaba Cloud revenue to rise by 4.8% YoY;
3. International commerce revenue to gain by 34.7% YoY; and
4. Local life revenue to hike by 11.1% YoY.
5. Cainiao revenue was estimated to grow by 28.1% YoY
6. Digital Media and Entertainment revenue was expected to decrease by 5%.

In addition, Alibaba disclosed in its 4QFY24 financial report the progress of its voluntary conversion to a dual primary listing on the Hong Kong Stock Exchange, stating that it is preparing for a primary listing in Hong Kong and looking forward to complete the conversion by the end of August this year.

Given Alibaba’s emphasis that it will continue to magnify investment to enhance its competitiveness, TF Securities revised its revenue forecasts for FY2025-27 from the original RMB 1.0196 trillion, RMB 1.11 trillion and RMB 1.2123 trillion to RMB 1.0249 trillion, RMB1.1236 trillion and RMB 1.2193 trillion, representing YoY growth of 9%, 10% and 9%, respectively.

Non-GAAP net profit forecast was revised upward from RMB155.8 billion, RMB160.4 billion and RMB163.8 billion to RMB156.5 billion, RMB162.2 billion and RMB164.7 billion.

The Buy rating was maintained.

Source: AAStocks Financial News

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

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BABA-SW (09988.HK) Lifts ~5%; Brokers Expect More Catalysts Down the Line

Taobao Tmall Group, a subsidiary of BABA, has implemented a "Refund Only" service following Pinduoduo, allowing buyers to get refunded without needing to return the purchased goods.

Taobao recently announced that it has optimised its "Refund Only" strategy to enhance merchants‘ post-sale autonomy.

Related News: BOCOMI Expects BABA-SW (09988.HK) 1FQ Total Rev. to Hike 7% YoY, Adj. EBITA Margin to Drop 2 ppts

Morgan Stanley believed this optimisation promoted a more balanced development between merchants and consumers, and enhanced Taobao's and Tmall's earning power.

Jefferies commented that despite the macroeconomic uncertainty, there are more catalysts in the future, and maintains BABA's Buy rating.

Source: AAStocks Financial News

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

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News Alert: Introducing 0.6% service fee on GMV to merchants on Tmall and Taobao

Alibaba will introduce 0.6% of software service fee on GMV per transaction to merchants on Tmall and Taobao from September 2024, as per local media news

Taobao will also optimise its “refund-only policy”, allowing merchants with good track record more autonomy in handling refund requests

New measures on software service fee will bring low-single digit percentage uplift to the company’s overall revenue in FY3/25

Valuation:

BUY with TPs of HKD109/USD110, based on SOTP methodology:
(1) Core commerce: 12x P/E on FY3/25F core commerce earnings (HKD85);
(2) cloud: 1x P/S on FY3/25F (HKD6);
(3) local services: 1x P/S on FY3/25F (HKD3); and
(5) digital media and entertainment: 1x P/S (HKD1).

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=20362

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Shares of Alibaba (NYSE: BABA) are down 75% over the last four years, as intensifying competition in China's e-commerce market, most notably from PDD Holdings' Temu, and a choppy economy pressured sales at Alibaba's Tmall and Taobao marketplaces.

Alibaba was David Tepper's largest holding as of March 31 after his firm more than doubled its stake in the quarter.

Alibaba operates one of the largest retailer marketplaces in China, but it doesn't sell goods from its own inventory. Instead, it generates a profitable stream of revenue from fees and commissions it charges to merchants that sell through its marketplaces, including AliExpress. It also has several revenue streams from cloud services, logistics services, and digital entertainment. However, online commerce is Alibaba's largest business.

Over the last year, the company generated $21 billion in free cash flow on $130 billion of revenue. The stock trades at an incredibly low price-to-free cash flow ratio of just 8.

In the March-ending fiscal fourth quarter, Alibaba's total revenue grew 8% year over year, driven by a 45% year-over-year increase in its international commerce business.

AliExpress continues to experience great momentum in overseas markets, but management also noted that its Tmall Taobao group saw higher purchase frequency after making efforts to be more price competitive.

Source: Motley Fool

https://finance.yahoo.com/news/forget-n ... 00270.html

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Alibaba, whose results will be unveiled on Thursday, is expected to see its net profit plunge 37.5 percent to 21.4 billion yuan from a year earlier for the quarter ending in June, though the revenue is anticipated to grow by 6.7 percent to 249.8 billion yuan.

Source: The Standard

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Alibaba misses revenue forecast

by Themis Qi

29 percent fall in its April-June net profit to 24.3 billion yuan (HK$26.46 billion), above estimates.

Revenue grew only 4 percent to 243 billion yuan in the quarter.

Taobao and Tmall Group saw revenues during the three months fall by 1 percent from a year ago to 113.4 billion yuan.

Source: The Standard

https://www.thestandard.com.hk/section- ... e-forecast