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<Research>CLSA Expects Alibaba (BABA.US) to Achieve DD Growth in Adj. EBITA This FY, Keeps ADR TP at US$165
BABA-W (09988.HK)(BABA.US) beat in its quarterly results, CLSA said in its report. Total revenue and adjusted EBITDA mounted by 7% and 36% YoY, surpassing the broker's estimate...
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<Research>CLSA Expects Alibaba (BABA.US) to Achieve DD Growth in Adj. EBITA This FY, Keeps ADR TP at US$165
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BABA-W (09988.HK)  -5.500 (-4.267%)    Short selling $1.36B; Ratio 7.556%   (BABA.US)      beat in its quarterly results, CLSA said in its report. Total revenue and adjusted EBITDA mounted by 7% and 36% YoY, surpassing the broker's estimate by 3%.

Excluding the impact of Sun Art and Intime, total revenue climbed by 10% YoY. The beat was mainly driven by TTG (Taobao and Tmall Group), whose revenue and adjusted EBITDA accelerated to 9% and 8% YoY growth, underpinned by an expansion in take rate.

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Cloud business revenue also grew faster at 18% YoY, with AI demand further accelerating after the Spring Festival. AIDC (Alibaba International Digital Commerce) revenue fell short of expectations, but losses narrowed, and quarterly breakeven was expected this fiscal year.

The broker foresaw Alibaba to maintain an 8%-10% YoY revenue growth this fiscal year, excluding the impact of Sun Art and Intime. Growth drivers include approximately 10% growth in CMR from TTG, and over 20% growth in AIDC and cloud business. Instant commerce investment is concerning, but double-digit growth in adjusted EBITA was still envisioned this fiscal year.

The broker raised its forecast for Alibaba's cloud business revenue and adjusted EBITDA by 0.5% and 5.3%, respectively, in light of the expansion in take rate. It reaffirmed a "High Conviction Outperform" rating on Alibaba's ADR, maintaining the target price at US$165.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-16 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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