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2026-11-12 10:46:56 In its report, BofA Securities expressed its views the planned spin-off and Hong Kong listing of BABA-W (09988.HK)'s semiconductor platform T-Head as a positive catalyst. The broker said the spin-off listing would help unlock strategic and commercial value, strengthen customer and partner confidence in T-Head, enhance independent transparency, and provide a direct financing channel. For Alibaba, the transaction could support more efficient capital allocation and establish more visible market valuation. The broker noted that management had previously discussed the possibility of listing T-Head and expanding external sales, so the announcement was not unexpected. However, the filing submitted in September came earlier than both the broker's and the market's expectations. Its key views include: external commercialization may accelerate in FY2027; T-Head may need to demonstrate operational independence, sustainable external demand, and a more diversified customer base; contribution to cloud business revenue is expected to become more visible over the coming quarters, though potentially uneven; the likelihood of an A-share listing in the near term is low, as limited direct external revenue may complicate the rationale for a recent mainland listing and reduce the chance of a simultaneous dual listing; strategic investors could enhance transaction value, and Alibaba may prioritize investors that can bring semiconductor supply chain, customer, or ecosystem resources rather than purely seeking financial placement. The broker conservatively estimated that T-Head's FY2027 revenue would exceed RMB10 billion, placing it between CAMBRICON (688256.SH) and another leading mainland AI chip peer in terms of 2026 forecasts. Its 7% domestic AI accelerator market share, according to IDC, is also slightly higher than those two peers. Using mainland AI chip peers as a broad reference, the broker preliminarily estimated T-Head's valuation range at USD30-75 billion, equivalent to about 12-30% of Alibaba's current market capitalization. However, the broker believed limited independent disclosures, undetermined transaction terms, and valuation volatility among peers all create significant uncertainty. It viewed the filing as a positive catalyst, but believed investors will require evidence such as strong revenue growth, regulatory progress, and transaction terms before assigning T-Head meaningful standalone value within Alibaba's segment valuation. The broker maintained its Buy rating on BABA-W (09988.HK), with an H-share TP of HKD175 and an ADR TP for Alibaba Group (BABA.US) at USD178. ~ AASTOCKS Financial News Website: www.aastocks.com | |