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<Research>CMBI Forecasts Alibaba (BABA.US) QC Investment Impact to Have Peaked out, Cuts TP to US$209.4
Recommend 2 Positive 3 Negative 1 |
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CMB International forecast that Alibaba (BABA.US) will post a 2% YoY revenue growth for 2QFY26E ending in September, roughly in line with market consensus. Customer management revenue (CMR) and Cloud Intelligence Group (CIG) revenue growth stood at 10% and 30% YoY. Despite considering the RMB37.4 billion impact on adjusted EBITA from investment in quick commerce (QC) business, the investment impact was expected to peak out in 2QFY26. With QC likely to halve unit economics loss by the end of this month, the impact of related investments on earnings is expected to fade starting this fiscal quarter. The broker lowered its target price for Alibaba ADR from US$210.3 to US$209.4, reflecting adjustments in earnings forecasts. The broker still viewed Alibaba as one of the key beneficiaries of the AI theme, with its capex and expedited investments in internal and external AI applications expected to drive long-term revenue and profit growth. The broker maintained a Buy rating on the stock. AASTOCKS Financial News Website: www.aastocks.com |
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