Futu News reported on the 12th that Alibaba was fined 18.228 billion yuan for carrying out a “choose one of two” monopoly behavior on an online platform and ordered to stop illegal acts. Morgan Stanley published a report saying that Alibaba's related fines accounted for about 4% of its total local sales in 2019. Although the amount of capital involved was a record, the bank believes this result is expected to dispel Alibaba's main concerns, and estimates that the market focus will shift back above the company's fundamentals.

According to the bank, after four months of investigation by the mainland regulatory authorities on Alibaba, Alibaba's stock price also fell by 16% during this period. It believes that the result of this fine removed the uncertain factors faced by Ali and caused the market to refocus on its fundamentals.

Damo believes that the absolute value of the fine imposed on Alibaba exceeds China's previous regulatory fines, but it also sets an example for anti-monopoly behavior against other Chinese internet platforms. The estimated amount of the fine is equivalent to 6% of the company's current net cash. However, the bank believes that the regulatory decision should relieve the main pressure on Ali, and that Alibaba does not need to carry out major organizational restructuring and asset divestment for the time being.

Looking ahead, the bank believes that the market will shift its focus to competition in the company's e-commerce field. Daimo maintained its “increase” rating on Alibaba's US stock and target price of 300 US dollars.

Currently, Alibaba's Hong Kong stock is up 7.61% to HK$234.6.