Morgan Stanley has lowered Alibaba's target price from HKD 100 to HKD 95, suggesting investors to take advantage of its weak stock price. They believe that Alibaba's current price level is supported, mainly because the current price implies a 7% shareholder return next year, which is attractive
JPMorgan: Reiterates Alibaba's "Overweight" rating, lowers target price from HKD 100 to HKD 95
The bank recommends investors to take advantage of the weakness in Alibaba-SW to accumulate shares. It is expected that Alibaba's fourth-quarter revenue will increase by 6% year-on-year to RMB 220 billion, in line with market expectations. Due to increased investments, Alibaba's adjusted net profit is estimated to drop by 20% year-on-year to RMB 22 billion, 23% lower than market expectations.
The report states that the company has increased its commitment to investing in core businesses such as domestic/international e-commerce and cloud, leading the bank to lower its adjusted earnings per share forecast for the current and next fiscal year by 3% and 6% respectively.
Although the bank's current adjusted earnings per share forecast for Alibaba's fourth quarter ending in March is 23% lower than market expectations, it believes that Alibaba's current price level is supported. This is mainly because the current price implies a 7% shareholder return next year, which is attractive. The bank forecasts that the growth rate of customer management revenue (CMR) in the fourth quarter will accelerate quarter-on-quarter as the group's online penetration rate in e-commerce increases and market share loss slows down. It is expected that the revenue growth rates of international e-commerce and Cainiao will maintain a healthy double-digit level for at least the next two fiscal years.
CITIC Securities: Maintains "Buy" rating for Alibaba-SW, target price at HKD 100
The company continues to increase shareholder returns, with a buyback of USD 4.8 billion in the fourth quarter of fiscal year 2024, resulting in a net decrease of 5.1% in outstanding shares for the full fiscal year 2024. Considering the company's ample cash reserves and robust operating cash flow, the bank expects the company to maintain good shareholder returns and maintains a relatively optimistic attitude towards its long-term digital business service capabilities.
The bank expects Alibaba's revenue in the fourth quarter of fiscal year 2024 to grow by approximately 6% to RMB 221.6 billion, with adjusted EBITA falling by 4% year-on-year to RMB 24.3 billion, and profit margin dropping by 1 percentage point to 11% year-on-year, mainly due to increased investments in businesses such as Taobao, Tmall, international digital commerce, Cainiao, and local services.
Regarding Taobao and Tmall, the company's organizational restructuring and focus on core businesses are showing initial results. The bank expects the year-on-year growth rate of gross merchandise volume (GMV) in the first quarter of this year to narrow the gap with the overall e-commerce industry, with customer management revenue (CMR) growing by approximately 4%. Investments in international digital commerce, Cainiao, and local services have all increased, with business revenue maintaining high growth, while profit margins may come under pressure.
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Citi: Raises TSMC's target price from TWD 740 to TWD 950, reiterates "Buy" rating
The bank stated that despite the impact of the earthquake on TSMC, it believes that its structural growth remains strong with limited short-term impact. The bank expects a 5% sequential decline in sales in the first quarter of this year (upper limit of guidance), benefiting from favorable exchange rate factors and improving market demand for advanced AI processes. It is expected that the gross margin will reach 53% or above, and believes that this strong momentum will continue throughout the year.
The bank expects second-quarter revenue to increase by 4% sequentially, but considering the impact of the earthquake, the gross margin may slightly decline. The bank stated that TSMC reaffirmed its guidance for annual revenue growth of 20 to 25% after the earthquake, and also expects the group's revenue to increase by 26% and 29% in 2024 and 2025 respectively. It believes that the group's profitability is accelerating, raising next year's profit forecast by 4%