Market Overview

Brean Likes Alibaba's Progress In Changing The Dynamics Of The Industry

Brean Likes Alibaba's Progress In Changing The Dynamics Of The Industry

Brean Capital’s Fawne Jiang expects Alibaba Group Holding Ltd (NYSE: BABA) to report robust FY4Q16 results, with in-line GMV and year-on-year take rate improvement, primarily driven by “improving mobile monetization as well as continued focus/shift towards scalable merchants.”

The analyst maintains a Buy rating on the company, with a price target of $96.

Positive Expectations

“Our checks suggest the company will continue to focus on improving user experience and monetization in FY2017 with emphasis on content, Internet celebrity and social,” Jiang mentioned.

With several initiatives and product upgrades scheduled for 2016, Jiang expressed optimism regarding Alibaba’s making progress in capturing the changing dynamics of the industry.

Related Link: Fitbit And Alibaba Group's Tmall Strike A MOU To Expand Wearable Device In China

“This will help to drive both traffic/GMV growth and offer potential room for further monetization improvement,” the analyst said.

Given the various acquisitions and investments made by Alibaba recently and the increase O2O investment, Jiang expects the company to witness increasing earnings pressure in the near term.


The company has announced that as of March 22, 2016, its total GMV to date for the fiscal year had crossed RMB 3 trillion, which implies GMV of RMB 730 billion for FY4Q16 or 22 percent year-on-year growth.

This is mostly in line with the consensus forecasts.

Monetization is expected to have continued to improve year on year during FY4Q16, driven by improvements in mobile monetization and continued shift to scalable merchants.

Jiang expects robust year-on-year take rate growth for the quarter, with 31.5 percent year-on-year revenue growth.

Latest Ratings for BABA

Jan 2020Initiates Coverage OnBuy
Jan 2020MaintainsOverweight
Nov 2019Initiates Coverage OnBuy

View More Analyst Ratings for BABA
View the Latest Analyst Ratings

Posted-In: Analyst Color Earnings Long Ideas News Previews Reiteration Analyst Ratings Tech


Related Articles (BABA)

View Comments and Join the Discussion!