BOCOMI Expects BABA-SW 1FQ Total Rev. to Hike 7% YoY, Adj. EBITA Margin to Drop 2 ppts

BOCOMI wrote in a report that it expected BABA to report 1FQ25 revenue of RMB251 billion, up 7% YoY, and an adjusted EBITA margin of 17%, down about 2 ppts YoY, mainly due to increased investment in e-commerce business to gain market share.

BOCOMI forecasted BABA's e-commerce GMV to grow 6% YoY in 1FQ, in line with market performance. Thanks to the continued implementation of price power and user-centric strategy, as well as the easing of competition on the live e-commerce platform as the traffic dividend recedes, GMV growth at Taobao and Tmall during the 618 shopping festival should be better than expected. The broker expected customer management revenue (CMR) to increase by 3% YoY, with the growth rate still slower than GMV, mainly because the monetisation rate of new merchant supply is still relatively low.

BOCOMI predicted BABA's EBITA growth to remain under pressure in 1FQ, taking into account continued investment at Taobao Tmall Group, as well as the active overseas deployment at Alibaba International Digital Commerce (AIDC) Group. The broker maintained its judgement that profit margins will gradually return to trend in 2026.

BOCOMI maintained its target price on BABA at HK$107 with a Buy rating.