Citigroup: Reiterates "Buy" rating on Alibaba-W with a target price of HKD 165
Citi released a research report stating that Alibaba-W's customer management revenue (CMR) for the fourth quarter of fiscal year 2025 increased by 12% year-on-year, and Taotian Group's EBITA grew by 8%, exceeding expectations; however, cloud revenue grew by 18% year-on-year and cloud profit margin increased by 8%, which, while in line with the bank's forecast, fell short of market expectations. The bank maintains a target price of HKD 165 for Alibaba's H shares and continues to give it a "Buy" rating, believing that the group represents China's artificial intelligence and macroeconomic rebound. The bank stated that entering fiscal year 2026, Alibaba will continue to focus on reinvesting in artificial intelligence and enhancing product pricing competitiveness to ensure stable market share, and it is expected that Taotian Group's EBITA may experience fluctuations. Due to the surge in demand from enterprise customers across various industries, the company's management anticipates that cloud service revenue will gradually accelerate in fiscal year 2026. With the increase in software costs and the rising adoption rate of comprehensive advertising tools by merchants, it is believed that the robust growth trend of CMR will continue into fiscal year 2026
According to the Zhitong Finance APP, Citigroup released a research report stating that Alibaba-W (09988) is expected to see a 12% year-on-year growth in Customer Management Revenue (CMR) for the fourth quarter of fiscal year 2025, with Taotian Group's EBITA growing by 8%, surpassing expectations; however, cloud revenue is expected to grow by 18% year-on-year and cloud profit margin by 8%, which, while in line with the bank's predictions, falls short of market expectations. The bank maintains a target price of HKD 165 for Alibaba's H shares, reiterating a "Buy" rating, and believes the group represents China's artificial intelligence and macroeconomic rebound.
The bank stated that entering fiscal year 2026, Alibaba will continue to focus on reinvestment in artificial intelligence and product pricing competitiveness to ensure stable market share, with Taotian Group's EBITA expected to experience fluctuations. Due to the surge in demand from enterprise customers across various industries, the company's management anticipates that cloud service revenue will gradually accelerate in fiscal year 2026. With increasing software costs and a rising adoption rate of comprehensive advertising tools by merchants, it is believed that the robust growth trend of CMR will continue into fiscal year 2026
