Jefferies: Raising Alibaba-W (09988) target price to HK$186, various businesses are expected to perform steadily in the next fiscal quarter

The Zhitong Finance App learned that Jefferies released a research report saying that it predicts that all business segments of Alibaba-W (09988) will perform steadily in the second fiscal quarter ending the end of September this year; the bank maintained Ali's “buy” rating. The target price of Hong Kong stocks was raised from HK$184 to HK$186, and the target price of US stocks (BABA.US) rose from 190 US dollars to 192 US dollars.

The bank estimates that total revenue for the second fiscal quarter will increase by 9.6% year on year, in line with market expectations. Revenue from artificial intelligence cloud and computing power services is expected to increase by more than 50% year on year to 60.5 billion yuan, better than market expectations of 48%. Segment profit margins are expected to improve to 12.3% quarterly; it is also expected that the year-on-year growth rate of cloud revenue will accelerate in the third and fourth fiscal quarters, and cloud revenue will increase by more than 50% year on year until the end of March 2028.

The bank estimates that Alibaba's AI lab and application revenue will increase 20% year over year to 3.6 billion yuan, and segment losses will narrow to 10.9 billion yuan quarterly, better than market expectations of 12.3 billion yuan. It also expects AI cloud and computing power services division EBITA to offset AI lab and application losses for the third fiscal quarter ending December this year.

In terms of e-commerce business, Jefferies estimates that net CMR will drop 5% year-on-year to 75 billion yuan, and immediate retail losses will narrow to about 9.8 billion yuan quarterly. Overall EBITA is expected to reach 34 billion yuan, higher than market expectations of 26.7 billion yuan.