Understanding the Market | Alibaba-W fell over 3% in the morning, Morgan Stanley pointed out that the company's adjusted earnings may be affected by positive investments in AI and instant retail
Alibaba-W's stock price fell over 3% in the morning, down 3.46% as of the time of writing, at HKD 167.3, with a trading volume of HKD 12.741 billion. Morgan Stanley expects that Alibaba's upcoming quarterly results will show a revenue growth of 5%, but adjusted earnings will significantly decline by 70% to RMB 11 billion, mainly affected by investments in AI and instant retail. Losses are expected to widen, with losses reaching RMB 5 billion in the next quarter, potentially maintaining a similar level in the following quarters
According to Zhitong Finance APP, Alibaba-W (09988) fell more than 3% in the morning session, and as of the time of writing, it was down 3.46%, trading at HKD 167.3, with a turnover of HKD 12.741 billion.
Morgan Stanley released a research report indicating that Alibaba-W is about to announce its financial results for the quarter ending September 30, predicting a 5% year-on-year increase in revenue, while adjusted profit is expected to drop 70% year-on-year to RMB 11 billion. The growth rate of cloud business revenue is expected to accelerate to 30% year-on-year, while customer management revenue is expected to maintain a growth rate of over 10% year-on-year. The bank pointed out that Alibaba's adjusted profit during the period may record a greater-than-expected decline due to active investments in AI and instant retail, but believes that these investments will further strengthen the group's long-term growth prospects in response to increased investment.
The bank predicts that Alibaba's investments in various businesses, including Tongyi Qianwen model, DingTalk, Quark, and Amap, will lead to an expansion of losses in all other businesses outside of e-commerce, cloud, and international business for the next quarter. It expects losses for the quarter ending September to reach RMB 5 billion, widening from a loss of RMB 1.4 billion in the previous quarter, and forecasts that this portion of losses may remain at a similar level in the coming quarters, with losses gradually improving as AI monetization accelerates in the next 2 to 3 years. As for instant retail, Morgan Stanley predicts that losses for the next quarter will expand to RMB 35 billion
