Citi Research released a research report on BABA-SW (09988.HK) (BABA.US). Considering the slower-than-expected growth of Alibaba's short video platform, its GMV growth may be relatively better. The broker assumed that Alibaba's relatively positive "618" sales may be due to its effective investment strategy, which is to boost customer purchase frequency through competitive prices and high-quality services.
In view of Alibaba's ongoing support for long-tail Taobao merchants and the time it takes for new ad tools to reflect improving monetization, the broker expected Alibaba's CMR growth this quarter to be slower than GMV growth. Therefore, Citi slightly cut its CMR growth forecast for FY1Q25 and FY2025, and maintained its target price for US stocks at US$122 and for H shares at HK$120. Given the company's ongoing commitment to buybacks, undemanding valuation and initial signs of stable market share, the broker kept its Buy rating on Alibaba.
Citi forecast that Alibaba's revenue for FY1Q25E will be RMB250 billion, a YoY hike of 6.8%; non-GAAP net profit will be RMB34.8 billion, with a profit margin of 13.9%; Taobao Tmall Group revenue was expected to be RMB118.1 billion, a YoY increase of 2.7%.
In addition, Citi also estimated Alibaba's adjusted EBITA in FY1Q25E to sink 12% YoY, with a profit margin of 16%; Taobao Tmall Group's EBITA to fade 2% YoY, with a profit margin of 41%. The broker foresaw Alibaba's results performance to be slightly ahead of the broker's and the market's current expectations.
《大行》花旗料阿里(BABA.US)首财季收入按年升6.8% 非通用会计准则净利润348亿人币
Citi Predicts Alibaba (BABA.US) 1FQ Rev. to Rise 6.8% YoY, Non-GAAP NP RMB34.8B
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