Jinwu Financial News | Goldman Sachs reported that Alibaba (09988) recently made frequent business adjustments and announced the sale of all of its shares in Gaoxin Retail (06808), a non-wholly-owned subsidiary. The maximum total revenue is expected to reach HK$12.298 billion (about 1.6 billion US dollars), but the completion of the transaction may result in accounting losses of about 13.2 billion yuan (1.8 billion US dollars). The disposition of Yintai Commercial was previously announced on December 17, 2024. This series of non-core business divestments is in line with management's strategic direction of focusing on core e-commerce and cloud computing businesses and enhancing shareholder returns. Judging from financial data, during the period from April to September 2024, although Gaoxin Retail contributed 7% of Alibaba's revenue, the profit contribution was less than 0.3%. Currently, Alibaba's stock price fell 5% after the 2QFY25E results were announced, which is in line with KWEB's performance. The market is concerned about its GMV growth gap.
Alibaba faces challenges brought about by macroeconomic and competitive factors, but it still has growth opportunities in the fields of international digital commerce, local services, logistics, cloud computing, etc., and needs to continuously optimize business and enhance user experience and monetization capabilities to cope with industry changes and competitive pressure. For example, after Taobao-Tmall users focused on investment, there was still room for improvement in GMV growth, and industry clothing sales rebounded in December.
Goldman Sachs is confident in Alibaba's core business development potential and strategic adjustment effects. It is expected that future performance growth will drive valuation repair and stock price increases. It expects revenue for the 2025-2027 fiscal year to be 1004.415 billion yuan, 1101.377 billion yuan, and 1211.384 billion yuan respectively, with EBITDA of 209.849 billion yuan, 209.742 billion yuan, 231.12 billion yuan, EPS They were 63.68 yuan, 67.18 yuan, and 70.81 yuan respectively. Alibaba was given a target price of US$134/HK$131 for 12 months, maintaining a “buy” rating.
