CICC International: Maintain a target price of HK$200.7 for BABA-W (09988) Hong Kong stock, with a rating of "Outperform" the market.

CCB International released a research report stating that it maintains a target price of HK$200.7 for Alibaba Group Holding Limited Sponsored ADR (09988, BABA.US) in Hong Kong, and also maintains its target price for its US stocks, with both being maintained at "outperform the market". CCB International believes that Alibaba Group Holding Limited Sponsored ADR has good visibility in cloud growth, mainly benefiting from strong demand for AI and its commitment to AI capital expenditure. Despite increased investment, the bank expects the company's cloud business adjusted EBITDA profit margin to remain stable at 8.8% in the quarter ending in September. The bank expects faster revenue growth of 3.5% year-on-year to RMB 254 billion in the September quarter, mainly due to accelerated growth in customer management revenue (CMR) at 30%. The bank's revenue forecast for the company is 0.6% higher than the consensus among institutions. In terms of profit, due to the company's aggressive investment in quick commerce (QC) and AI, the decline in adjusted net profit for Chinese e-commerce and other businesses exceeded the bank's previous expectations. Increased investment may impact short-term profitability, but Alibaba Group Holding Limited Sponsored ADR will maintain a good position to seize structural AI opportunities and achieve synergy between Alibaba Group Holding Limited Sponsored ADR and its main market business, thereby consolidating its long-term growth goals.