M Stanley Reiterates Alibaba as Top Pick of CN Internet; Penalty on Ant Is Positive Catalyst
The People's Bank of China (PBOC) recently announced a fine of RMB7.12 billion for Ant Group and its affiliates, and ordered the fintech firm to shut down its illegal business operations and compensate consumers in accordance to relevant laws and regulations, Morgan Stanley remarked. Ant Group later expressed in a statement that relevant rectifications have been carried out and that the company will further strengthen its compliance to laws and regulations.
The broker viewed the regulatory decision on Ant Group as a positive catalyst for the share price of Alibaba, believing that this marks a significant milestone, or even the end of, the regulatory scrutiny on the restructuring of the fintech business.
Morgan Stanley restated $Alibaba(BABA.US$ as the top pick among Chinese internet shares as well as a prime beneficiary of the easing of the regulatory environment. Also, the broker remained constructive on the continued fundamental improvement, attractive valuation and capital returns of the group. The US share target price for Alibaba was set at USD150, with its rating maintained at Overweight.
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