Morgan Stanley: Alibaba-W's rise in the Gaode street ranking is an important step in the super app strategy, maintaining an "Overweight" rating
JP Morgan released a research report stating that Alibaba-W has launched the Gaode street-sweeping ranking, marking an important step in its "super app" strategy. This feature is based on Gaode's user travel data, displaying real-time rankings of popular destinations and encouraging offline consumption through a subsidy program. Morgan Stanley maintains an "overweight" rating on Alibaba's H shares with a target price of HKD 165, believing that this move will benefit Alibaba's stock price and enhance user stickiness and monetization capability. The key to success lies in technological capability and the cultivation of user habits
According to Zhitong Finance APP, JP Morgan has released a research report stating that Alibaba-W (09988) has announced its return to offline physical store operations. Its mobile map application, Amap, officially launched the "Amap Street Ranking" in-app feature yesterday. This ranking is based on the real travel data of approximately 1 billion Amap users and leverages its advantage of covering over 7 million restaurants and 13 million local service destinations nationwide, displaying real-time popularity rankings of popular destinations including restaurants, hotels, and attractions. In addition, Amap announced a subsidy of over 1 billion RMB through the "Fireworks Good Store Support Program" to encourage offline consumption, covering transportation and in-store spending. Morgan Stanley maintains an "Overweight" rating on Alibaba's H-shares with a target price of HKD 165, based on a projected price-to-earnings ratio of 12 times for 2027.
The bank indicated that Alibaba is transforming the local life market in China, which is favorable for Alibaba's stock price from a market sentiment perspective, primarily because Alibaba has strong execution in the food delivery and instant delivery sectors. For Alibaba, the entry barrier for in-store business is relatively low due to: 1) Amap has over 100 million daily active users, providing a large flow of traffic; 2) Amap has already covered a large number of merchants; 3) Merchant coverage can be rapidly increased through third-party service providers, similar to Douyin's approach in 2022.
Morgan Stanley pointed out that the launch of the Amap Street Ranking is an important step in Alibaba's "super app" strategy. Amap is expected to become a major entry point for Alibaba's offline local services, parallel to the online traffic entry of Taobao. This move can also create synergies with Ele.me and Alipay, enhancing user stickiness and monetization capabilities, and may open up more offline consumption scenarios. However, the success of this plan hinges on technological capabilities and the cultivation of user habits
