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Wednesday, June 14, 2017

Alibaba: Daiwa Lifts Price Target, Sees 25% Upside

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Daiwa Capital Markets is the latest brokerage to lift its price target on Alibaba after the Chinese e-commerce giant’s two day analysts meeting last week.

The brokerage was upbeat about the company’s embrace of big data to growth its core e-commerce business:


Bloomberg News

Data! Data! Data! If we had to summarise this year’s investor day event in one word, it would be “data”, as all the senior management repeatedly emphasised the importance of data for the growth of Alibaba’s various business segments. We have long been believers of Alibaba’s unified-ID positioning and expect the company to further improve its consumer personalisation capability within Mobile Taobao. In addition, we see significant revenue upside from the monetisation of Alibaba’s comprehensive consumer behaviour data assets on hand with the recent launch of Brand DabaBank marking a solid first step.

The brokerage lifted its price target to $175 a share from $150 a share. Here’s the details on the valuation:

We reiterate our Buy (1) call and increase our 12-month TP to USD175 (from USD150), based on a new target PER of 37x (from 34x), a 25% premium to Alibaba’s China Internet peers, applied to our FY18E non-GAAP EPS. We raise our target multiple mainly due to likely accelerating revenue growth in FY18 and improving earnings visibility. Alibaba remains our top pick in the China e-commerce sector. We view the stock’s current FY18 and FY19E PER (March 31 year-end) as attractive compared to Alibaba’s global large cap Internet peers.

UOB Kay Hian yesterday lifted its price target to $173 a share from $139 a share. Fore more details please read Alibaba: Stock Can Rally 24% As Data, Content Feed E-commerce Growth.

Overnight, Alibaba shares fell 1.8% to $136.60 a share.

 

 

June 14, 2017 at 07:47AM

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from Robert Guy

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