TF Securities: BABA-SW's Cainiao Share Buyback Boosts Growth Outlook

TF Securities reports on $BABA-SW(09988.HK)$ 's decision to withdraw Cainiao's IPO application and acquire equity worth $3.75 billion from Cainiao $Cainiao Smart Logistics Network Limited(810537.HK)$ 's employees and minority shareholders.

This move aims to strengthen strategic synergies between Taobao Tmall Group and Alibaba International Digital Commerce Group (AIDC).

The share buyback program will increase by $25 billion by March 2027, with $35.3 billion remaining for repurchase over the next three fiscal years.

TF Securities predicts BABA's revenue for FY2024 to FY2026 to reach approximately RMB938.2 billion, RMB1.03 trillion, and RMB1.13 trillion, respectively, with YoY growth rates of 8%, 9%, and 10%.

Net profit is expected to increase to RMB159.4 billion, RMB168.3 billion, and RMB179.5 billion for the respective periods, marking YoY growth rates of 13%, 6%, and 7%.

TF Securities maintains a Buy rating on the Group.