Understanding the Market | Alibaba-W fell nearly 4% as investment in takeaway and flash purchase businesses increased, Goldman Sachs lowered the company's earnings forecast and target price
Alibaba-W's stock price fell nearly 4%, down 3.75% as of the time of writing, at HKD 105.3, with a turnover of HKD 10.828 billion. The company announced it will conduct a platform subsidy of HKD 50 billion over the next 12 months, reflecting its emphasis on the Taobao flash sale business. Goldman Sachs lowered its earnings per share forecast for Alibaba for the fiscal years 2026 to 2028 by 4% to 13%, while raising its revenue forecast by 2% to 4%. The target price was reduced from USD 159 to USD 150, and the target price for H shares was lowered from HKD 154 to HKD 146
According to Zhitong Finance APP, Alibaba-W (09988) fell nearly 4%, as of the time of writing, it was down 3.75%, trading at HKD 105.3, with a turnover of HKD 10.828 billion.
In terms of news, on July 2, Taobao Flash Sale announced a platform subsidy of HKD 50 billion over the next 12 months. Previously, on June 23, Taobao Flash Sale and Ele.me announced that daily orders had exceeded 60 million. From the order structure, Flash Sale has expanded to all categories, with non-tea beverages accounting for 75%. Alibaba also revealed in its previous earnings call that Taobao Flash Sale has exceeded expectations in both scale growth and efficiency improvement. Citigroup believes that the group's provision of large-scale subsidies reflects management's satisfaction with the initial results of Taobao Flash Sale's order volume reaching 60 million within two months of launch, pointing out that by integrating Ele.me and Fliggy into the Chinese retail business, Alibaba has established the importance of instant delivery and travel services as core e-commerce business development.
Goldman Sachs released a report stating that Alibaba's U.S. stock price has fallen 16% in the past month. The firm summarized investors' main concerns regarding the following issues: (1) the strategic restructuring of Ele.me and Fliggy into the Chinese e-commerce business group, (2) the latest developments in Taobao Flash Sale and the competitive landscape of instant retail, (3) Alibaba's performance during the 618 shopping festival. Considering the strong business momentum but increased investment in food delivery and instant retail, the firm lowered its earnings per share forecast for Alibaba for the fiscal years 2026 to 2028 by 4% to 13%, while raising its revenue forecast for the same period by 2% to 4%, and reduced Alibaba's U.S. stock target price from USD 159 to USD 150, and lowered Alibaba's H-share target price from HKD 154 to HKD 146
