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<Research>UBS Trims BABA-W (09988.HK) TP to $185, Expects 56% Drop in 3FQ Adj. EBITA on Rich AI Opportunities
Recommend 13 Positive 15 Negative 6 |
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UBS published a research report predicting that BABA-W (09988.HK) will see a 2% YoY increase in revenue to RMB285 billion for 3FQ ended December 2025, compared to the market consensus of RMB293 billion, partly due to the divestment of first-party offline retail assets, which previously accounted for a high single-digit percentage of the Group's revenue. BABA-W is in an investment phase, with AI-native apps and several new features showing solid traffic, supporting long-term upside for AI opportunities, the report quoted management as saying. Overall, UBS expected BABA-W's 3FQ adjusted EBITA to be RMB24.3 billion (market expectation of RMB36.5 billion), implying a 56% YoY decline. UBS believed that, even if the market's forecasts for core e-commerce become conservative, attention should be paid to AI opportunities. Therefore, the broker trimmed its target prices for BABA-W's US stock/ H-shares from US$216/ $210 to US$190/ $185, due to lowered CMR forecasts, Taobao Tmall Group (TTG)'s valuation multiples and earnings forecasts, with rating at Buy. AASTOCKS Financial News Website: www.aastocks.com |
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