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<Research>JPM Foresees BABA-W Last Qtr Adj. NP to Rise 14% YoY; Local Ecommerce Key Metrics on Positive Developments
Recommend 27 Positive 42 Negative 11 |
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JP Morgan, in its report, estimated BABA-W (09988.HK) to show positive developments in the December quarter, including a QoQ improvement in GMV growth, thanks to robust GMV growth on Taobao and Tmall during Double 11; and accelerated growth in CMR from 2.5% in September quarter to 6% in December quarter, given an introduction of 0.6% commission monetization for Taobao sellers in September 2024. However, the broker considered that it is less likely that Taobao and Tmall Group will continue to realize positive adjusted EBITA growth in the coming quarters due to a change in CEO or a different execution policy; a grossly competitive market environment; and the stage of Alibaba's investment cycle (2025 is the first year of Taobao and Tmall's three-year investment cycle), which suggested that the focus may now be more on GMV and CMR rather than profit. Stabilizing market share and improving monetization will naturally lead to earnings growth while costs are under control. The broker reiterated its Overweight rating on BABA-W with a target price of $120. It expected Alibaba's revenue to grow by 8% YoY in the December quarter, beating market estimates by 1%, vs 5% YoY in the September quarter. The broker also predicted the adjusted net profit to rise by 14% YoY, beating market estimates by 15%. AAStocks Financial News |
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