Citigroup: Lowered Alibaba-SW (09988) target price to HK$132, second-quarter performance in line with expectations.

Citigroup released a research report stating that it has lowered the target price of Alibaba-SW (09988) Hong Kong and US stocks by 0.75% to 1.5%, from 133 Hong Kong dollars to 132 Hong Kong dollars, and from 135 US dollars to 133 US dollars. The investment rating is maintained as "buy". As of the end of December last year, the bank expects the company's GMV growth to accelerate again in the third quarter. In addition to benefiting from the above reasons, it can fully reflect the contribution of basic software service fees, but some will be offset by new businesses and reinvestments. The report pointed out that Alibaba's performance in the second quarter ending in September met expectations, and after adjustment, net profit and EBITA slightly exceeded the bank's expectations. Customer management revenue (CMR) increased by 2.5% year-on-year in the quarter, and the conversion rate remained stable, reflecting a slowdown in the growth rate of Gross Merchandise Volume (GMV). However, the management is optimistic about the strong performance of the "Double 11" business and potential stimulus policies, as well as the group's reiteration of reinvestment in the Taobao group, international, and cloud businesses, confirming that the loss ratio of relevant sectors is improving and the profitability of other businesses is also improving.