Morgan Stanley released a report stating that the rebound in the stock price of Alibaba-W (09988.HK) (BABA.US) corresponds to a projected P/E ratio of 11 times for the fiscal year 2026, compared to PDD Holdings (PDD.US) at 11 times, jd.com (JD.US) at 12 times, Tencent (00700.HK) at 16 times, and Meituan (03690.HK) at 19 times (projected for 2025). The bank points out that it is still too early to comment on the impact of consumption recovery after recent stimulus measures by the mainland government, but believes that the fundamentals of Alibaba are improving. It is expected that the company's customer management revenue (CMR) growth will start to rebound in the next quarter. The bank estimates that Alibaba's CMR for the second quarter of the 2025 fiscal year ending in September will increase by 3% year-on-year, with losses in other businesses narrowing.

The bank mentioned that as of the first week of September, southbound funds held a 0.4% stake in Alibaba, which increased to 2.7% by the end of September. According to Wind data, the net inflow reached 39 billion RMB (approximately 5.5 billion USD). It is estimated that southbound funds' holdings could reach low double digits (%), referencing the average holdings of other shares in the first year of entering the Hong Kong Stock Connect. Morgan Stanley estimates that southbound funds may hold 8% to 17% of Alibaba's shares within a year, with an expected net inflow of 13 to 17 billion USD (approximately 101 to 132.1 billion HKD).

Morgan Stanley maintains a 'market perform' rating on Alibaba (BABA.US) and a target price of $90.