CMB International: Lowered Alibaba Group Holding Limited Sponsored ADR (BABA.US) target price by 1.4% to $206.4, maintained "buy" rating.

China Merchants International released a research report, indicating that based on the SOTP valuation, the target price of Alibaba Group Holding Limited Sponsored ADR (BABA.US, 09988) has been marginally reduced by 1.4%, from $209.4 to $206.4. The company continues to view the group as one of the core beneficiaries in the artificial intelligence industry and thus maintains a "buy" rating. The report states that Alibaba Group Holding Limited Sponsored ADR's cloud business revenue in the second quarter grew by 34%, surpassing the bank's and market expectations. Management also emphasized the strong current customer demand. The bank believes that this trend is expected to support high-speed revenue growth in the cloud business in the coming quarters. Looking ahead to the third quarter, due to the high base effect, management expects that the group's customer management revenue (CMR) will experience some fluctuations in the third quarter of the fiscal year 2026. The bank believes that the group's plan to significantly reduce losses in the immediate retail business in the third quarter aligns with the bank's and market expectations, but the market may still be concerned about the progress of the synergies generated by this business.