Alibaba Has 63% Upside And Room For Margin Expansion, Bullish Analyst Says

$Mizuho Financial(MFG.US)$ analyst James Lee reiterated a Buy on Alibaba with a $160 price target.

- He expects September quarter GMV growth to improve from June to 5% Y/Y and positive change in December as demand for discretionary products pick up during Singles' Day promotions with the reopening of the supply chain.

- Lee anticipates the cancellation rate to drop in the back half of CY22 as shipping capacity becomes normalized, resulting in increased profitability.

- He expects lower-tier market investments to moderate losses, offering ample room for margin expansion, which could potentially add 10 points to margin long-term.

- The analyst said the management should focus on EV and financial services, which have the most significant demand for data.

- BABA appears to have a competitive advantage in financials due to its experience supporting Alipay and Ant Group.

- In EV, the company has an investment stake in $XPeng(XPEV.US)$.

- For the public sector, security is essential, so BABA offers private cloud solutions.

- Lee expects the TAM for these projects to be large and well-funded.

$BABA-SW(09988.HK)$ $Alibaba(BABA.US)$ $China Concept Stocks(BK2517.US)$ $Hang Seng TECH Index(800700.HK)$

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whqqq : There seems to be a lot of good news today.

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