BOCOM INTL: Maintains a "Buy" rating on Alibaba-SW (09988) with a target price of 107 Hong Kong dollars.

BOCOM INTL release a research report stating that they have seen an improvement in the user activity and stickiness of Alibaba-SW's Taobao platform, as well as the potential for new users brought in by WeChat's interconnection. There is a significant certainty in the potential space for increasing long-term monetization rates. The current price corresponds to a 2025 P/E ratio of 10x, making the valuation attractive. Based on a 2025 P/E ratio of 13x, the target price is maintained at HKD 107, with a "buy" rating. The report states that the company's total revenue in the second quarter of the 2025 fiscal year is RMB 236.5 billion, a 5% year-on-year increase, which is basically in line with the bank's and market expectations. Adjusted earnings per share is RMB 15.06, a 4% year-on-year decrease, slightly below the bank's expectations by 3%, but in line with market expectations. The growth rate of Taobao's gross merchandise value (GMV) in the September quarter is consistent with customer management revenue (CMR), indicating a stabilizing trend in monetization rates. Despite the bank's belief that Taobao's strategic investments still cause some fluctuations in monetization rates, the full quarter contribution of technical service fees in the next quarter and the penetration of full-site promoted products are expected to bring steady CMR growth. It is expected that the overall revenue growth rate in the December quarter will be 8.6%, with an adjusted EBITA of approximately RMB 57.3 billion, an 8% year-on-year increase, of which Taobao's revenue may increase by 2% year-on-year due to the peak season, while other businesses continue to reduce losses year-on-year.