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<Research>CMBI Foresees BABA-W Quick Commerce Loss to Have Peaked; BABA-W Key Beneficiary of AI Theme
Recommend 20 Positive 35 Negative 9 |
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CMB International released a report predicting that BABA-W (09988.HK)(BABA.US) will post a 2% YoY revenue growth for 2QFY26E, roughly in line with street consensus. Among which, Customer Management Revenue (CMR) and Cloud Intelligence Group (CIG) revenue growth were estimated to be 10% and 30%, respectively. Despite considering the impact (approximately RMB37.4 billion) of investments in quick commerce on adjusted EBITA, the broker foresaw the investment impact to peak in 2QFY26. With quick commerce expected to halve unit economic losses by the end of this month, the impact of related investments on profit will begin to subside in the current fiscal quarter. The broker fine tuned Alibaba's US stock target price from US$210.3 to US$209.4 to factor in adjustments in earnings forecasts. The broker believed Alibaba remains a key beneficiary under the AI theme, with its capex investments and accelerated AI adoption both internally and externally expected to drive long-term revenue and profit growth. The Buy rating was maintained. AASTOCKS Financial News Website: www.aastocks.com |
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