Huatai Research lifted its target price for Alibaba Group Holding (09988) to US$258.6 from US$252.8 per ADS (or HK$250.52 from HK$244.9 per HK-listed share) and maintained its "buy" rating.
The research house said Alibaba's core commerce retail business resumed healthy gross merchandise value (GMV) growth after the height of the COVID-19 pandemic in China. It thinks the recommendation feed monetization will aid recovery in customer management revenue (CMR) growth.
Huatai expects the gap between commission revenue growth and GMV growth to narrow in FY2021, as the shift in GMV mix from third- to first-party moderates. Huatai forecast a combined CAGR of 19.2% for CMR and CR over FY2021-23.
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