[ET Net News Agency, 10 July 2020] Nomura raised its target price for Alibaba Group
(BABA)(09988) to US$309 from US$249 for ADS (or HK$299.34 from HK$241.23 for HK-listed
shares) and maintained its "buy" rating.
The research house estimated 28% growth in Tmall physical goods GMV (gross merchandise
value) in the June quarter, which echoes management's positive tone on business recovery
on the group call.
Nomura modeled in 21% growth for the combined customer management and commission
revenue, within which customer management revenue (CMR) likely rose 22%, driven by a
recovery in GMV and the new ad products launched in the quarter.
In 2H, Nomura thinks BABA could further ramp up investments into its e-commerce
ecosystem, including the expansion in lower-tier markets. Such investments could bring
about accelerated e-commerce growth, but could temporarily pressure the profitability of
its e-commerce business, in our view. (KL)