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<Research>Macquarie Expects BABA-W (09988.HK) Instant Retail Biz Losses to Persist for Some Time, Chops TP to $212.7
Recommend 9 Positive 13 Negative 14 |
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BABA-W (09988.HK)'s 2FQ26 results were largely in line with expectations, with strong AI cloud demand and solid e-commerce advertising business jointly driving accelerated overall revenue growth, according to Macquarie's research report. It is anticipated that the increase in enterprise adoption rates will bring tangible cross-selling opportunities to various cloud revenue sources. The broker acknowledged BABA-W's positive progress in achieving high-quality market share gain and operational scale, but believed that losses may persist for some time. Currently, it is estimated that its customer management revenue (CMR) for the December quarter will grow by 6% YoY, and the Group's adjusted EBITA will reach RMB38.6 billion, implying that investments related to instant retail will result in a loss of approx. RMB23 billion. Based on the unchanged multiples in the SOTP valuation method, Macquarie chopped its target prices for BABA-W's H-shares/ US stock by 7% from $228.2/ US$234.70 to $212.7/ US$218.8, with ratings at Outperform. AASTOCKS Financial News Website: www.aastocks.com |
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