CLSA has released a report projecting Alibaba's (BABA, Financial) revenue for the last quarter at RMB 275 billion, marking an annual growth improvement of 5.5%. This increase is attributed to a rebound in Taobao and Tmall's gross merchandise value and customer management revenue, driven by the "trade-in" policy and better monetization.
International e-commerce continues to show robust growth, with AliExpress deepening user penetration and the e-commerce platform Trendyol expanding its geographical presence. Alibaba Cloud may resume double-digit growth due to strong demand for AI products.
However, due to ongoing e-commerce investments, CLSA anticipates Alibaba's adjusted EBIT for the last quarter to drop by 1.6% year-over-year to RMB 52 billion. The extension of the "trade-in" policy is expected to further enhance revenue growth in the last quarter and the fiscal year 2026.
The sale of Intime Retail and Sun Art Retail could incur a $3 billion loss in the fourth quarter ending in March, but it should improve future profits and shareholder returns. CLSA maintains an "outperform" rating with a target price of $125.
