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<Research>UBS Keeps Buy on BABA-W; Results Miss, But Long-term Outlook Positive
Recommend 11 Positive 17 Negative 9 |
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BABA-W (09988.HK)'s 3QFY26 results for the period ending December 2025 were below expectations, UBS wrote in its research report. The company's revenue grew by 1% YoY to RMB284.8 billion, slightly below expectations, while its adjusted EBITA sank by 58% YoY to RMB23 billion, in line with the broker's expectations but below the market expectation of RMB32 billion, primarily due to weaker-than-expected performance in the e-commerce business and the increased AI investment. In terms of instant commerce, BABA-W's management maintains its investment commitment, with the GMV target for FY28 unchanged. It is expected that as the strategy shifts towards higher-value orders and non-food categories, unit economic benefits will improve in the coming quarters, with profitability targeted for FY29. Regarding AI and cloud business, UBS expects external cloud revenue growth to accelerate from 36% in 3Q to 40% in 4Q. Management anticipates that MaaS will become the largest revenue driver, with token consumption on the Bailian platform growing sixfold over the past three months. UBS has kept a Buy rating on BABA-W, with a target price of HKD185. AAStocks Financial News |
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