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<Research>Daiwa Trims BABA-W (09988.HK) TP to HKD184 and Cuts Earnings Forecast as Quarterly Results Miss
Recommend 21 Positive 43 Negative 16 |
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Daiwa published a research report on BABA-W (09988.HK), which had delivered 3QFY26 results miss, owing to underwhelming cloud revenue growth and group profitability. During the earnings call, management reiterated its medium-term targets, including achieving USD100 billion in external AI and cloud business revenue within five years, and projecting quick commerce GMV at RMB1 trillion by FY28, with overall profitability turning positive by FY29. The focus on monetization of AI and cloud businesses is strengthening, in Daiwa's view. As of 11MFY26, external AI and cloud business revenue reached RMB100 billion, with overseas market revenue accounting for a high-teens percentage. With the average daily token processing volume in March tripling the level in December 2025, and price hikes in cloud products, external cloud business revenue was expected to accelerate in 2026. Based on the weaker-than-expected 3FQ earnings, Daiwa lowered Alibaba's EPS forecast for FY26-28 by 6-15%, reiterated a Buy rating, and reduced the SOTP-based 12-month TP from HKD191 to HKD184. Daiwa maintained its view on the long-term positioning of the AI-driven cloud business but cautioned that further subsidies for user acquisition costs are a major downside risk. AASTOCKS Financial News Website: www.aastocks.com |
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