highlowpoker| Daiwa: Maintain Alibaba-SW "Buy" rating and lower target price to HK$98

Daiwa released a research report sayinghighlowpoker, maintain the "Buy" rating of Alibaba-SW (09988) and downgrade the company's earnings per share forecast for this fiscal year and next by 4%, based on its involvement in Taotian Group and international e-commerce businesseshighlowpokerThe target price was reduced from HK$103 to HK$98. The company's fiscal fourth quarter revenue in fiscal 2024 was in line with expectations, but non-GAAP earnings before interest, tax and amortisation (non-GAAP)

EBITA) fell short of market expectations by 7%, mainly because the company continues to compete for user and cloud business investment.

The bank pointed out that the company's share repurchase plan demonstrates a commitment to release shareholder value. In addition to repurchase and dividends, accelerated growth in customer management service revenue and positive growth in external cloud revenue will lead to a significant revaluation of the stock. The bank said that it has a more positive view on Alibaba Cloud's long-term profitability than the market, based on economic scale effects. The bank expects Alibaba Cloud to resume growth in the second half of the current fiscal year and benefit from artificial intelligence demand.