King's financial information | Ckh Holdings stated that Alibaba (09988/BABA) is expected to achieve revenue growth and non-GAAP net income in line with market expectations in 2QFY25 (year ending in March). The management team is still committed to investing in improving the user experience of the core 88VIP user group, which may help maintain market share at least in the context of weakened consumer sentiment and lay a solid foundation for long-term currency monetization capabilities.

The bank pointed out that the monetization speed of Taotian Group in 2QFY25 may exceed the bank's expectations; benefiting from better-than-expected merchant acceptance across the site, and with the further increase in merchant penetration rate and the potential improvement in consumer sentiment in the future, the speed of monetization may be faster. The development of international business, the recovery of cloud business, and the expected reduction of losses in non-core businesses are all expected to meet expectations. Stable and predictable shareholder return initiatives, as well as the increase in incremental funds from southbound investors after inclusion in the Hong Kong Stock Connect, are expected to provide support for valuation.

The bank has raised its US stock target price based on SOTP valuation by 5% to $133.8, corresponding to 13x FY26E PE. Reiterated a buy rating.