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<Research>Nomura Expects Alibaba Group Holding (BABA.US) Cloud Rev. to Continue Growing in Coming Yrs; TP US$215
Recommend 17 Positive 27 Negative 16 |
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BABA-W (09988.HK) recorded a 5% YoY revenue growth for 2FQ26 ended September, which is 1% higher than market consensus, according to Nomura's research report. Consolidated adjusted EBITA decreased by 78% YoY to RMB9.1 billion, beating the broker's forecast by 35%, mainly due to lower-than-expected losses from the segment of All others. The management has not clearly indicated whether the cloud revenue growth rate will continue at the previous 34% pace in the next quarter. However, during the conference call, the management repeatedly emphasized observing strong ongoing demand for AI cloud services across all the industries, supporting the rapid growth of its backlog cloud contracts. Given this strong demand, the management reiterated the viewpoint conveyed at the September BABA-W's Cloud Conference that the capital expenditure target of RMB380 billion for the next 3 years now appears conservative. Based on the optimistic tone of BABA-W's management, Nomura believed that the accelerated growth momentum of BABA-W's cloud revenue should continue in the coming quarters. Therefore, the broker kept rating at Buy for BABA-W's US stock, with a target price of US$215, implying a projected FY2027 PE ratio of 21x. AASTOCKS Financial News Website: www.aastocks.com |
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