Citigroup: Baba-W (09988) Cloud business revenue growth continues to accelerate, reaffirming "buy" rating.

Citigroup released a research report stating that as of the end of March this year, Alibaba (09988) customer management revenue (CMR) performance for the fourth quarter of fiscal year 2025 is expected to remain stable. With the increase in merchant service fees and penetration rate of full-site promotion (Quanzhantiu), the monetization ratio has increased and the growth momentum of CMR is expected to continue. Cloud business revenue growth may also continue to accelerate. The bank also adjusted its forecast for the fourth quarter of fiscal year 2025, raising total revenue forecast by 0.7% while lowering non-GAAP net profit forecast by 3.8%. The price target for the company was slightly reduced from HK$166 to HK$165, with a reiterated "buy" rating. Recently, the market has been paying attention to the impact of tariff policies on domestic consumption trends, as well as any impact on the demand for cloud services from large enterprises and small and medium-sized enterprise customers. Citigroup pointed out that Alibaba's stock price has adjusted by over 20% in the past week, and its valuation has returned to an attractive level. Considering the relatively small exposure of its AIDC business in the United States, coupled with ongoing innovation in cloud technology and research and development of basic models, these factors may offset each other's impact.