Citigroup released a research report stating a 0.75% to 1.5% reduction in the target price of Alibaba-SW (09988) Hong Kong and US stocks, from 133 Hong Kong dollars to 132 Hong Kong dollars; from 135 US dollars to 133 US dollars. The investment rating remains as 'buy'. As of the end of December this year, the bank expects the company's GMV growth to accelerate again. In addition to benefiting from the above reasons, it can fully reflect the contribution of charging basic software service fees, but some will be offset by new business and reinvestment.
The report points out that as of the end of September, Alibaba's performance in the second quarter met expectations, and adjusted net profit and EBITA slightly exceeded the bank's expectations. During the quarter, Customer Management Revenue (CMR) increased by 2.5% year-on-year, with a stable conversion rate, reflecting a slowdown in Gross Merchandise Volume (GMV) growth. However, the management is optimistic about the performance of the 'november 11 shopping festival-related' business and the potential stimulating policies. In addition, the group reiterates reinvestment in Taotian Group, international, and cloud business, confirming that the loss rate in related sectors is improving, and the profit capability of other businesses is also improving.
