Citigroup released a research report stating that it maintains a "buy" rating on Alibaba-SW (09988) and lowers the target price from HKD 120 to HKD 115. Although the order volume recorded double-digit growth and the gross merchandise volume (GMV) recorded high-unit growth, customer management revenue (CMR) only increased by 1%. The company's first-quarter performance was mixed, with total revenue falling short of expectations, but adjusted net income exceeding expectations.
The report pointed out that management expects that with the widespread adoption of new advertising tools, CMR growth will accelerate in the coming quarters and be consistent with GMV, and the gap will narrow. As Alibaba is still committed to reinvesting in the Tao Tian group and international digital business groups, the loss trend of other business units will improve and achieve a balance of gains and losses within 1-2 years, thus supporting the group's better EBITA. With the improvement of CMR realization, the resumption of cloud computing business acceleration, the improvement of efficiency in international digital business groups, and continued shareholder return, it is bullish on Alibaba's fundamental prospects.