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<Research>JPM Reiterates BABA-W (09988.HK) Overweight Rating; Alibaba Cloud/ Quick Commerce Valuations Overlooked
Recommend 19 Positive 24 Negative 15 |
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JP Morgan's research report covered BABA-W (09988.HK), of which quarterly results for the period ending December last year highlighted a specific and testable investment proposition: the market is pricing the stock as though it is worth only its domestic e-commerce earnings. The broker forecast that Alibaba's domestic e-commerce profit for FY27 will be approximately RMB196 billion, implying that the valuations of Alibaba Cloud and quick commerce platforms are completely overlooked, reflecting no value. Alibaba Cloud's revenue growth rebounded from a trough of 7% six quarters ago to 36% in the most recent quarter, with AI product revenue achieving triple-digit growth for ten quarters in a row. Management targets cloud business revenue to reach USD100 billion in the next five years, representing a CAGR of about 47%. JP Morgan lowered Alibaba's FY26 revenue/ adjusted EPS forecasts by 1%/ 10% to reflect the December quarter results. It also reduced FY27 revenue/ adjusted EPS forecasts by 3%/ 5%, thus cutting the US stock target price for Alibaba (BABA.US) from USD215 to USD205, and the H-share's target price from HKD210 to HKD200. The Overweight rating was reiterated. AASTOCKS Financial News Website: www.aastocks.com |
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