Alibaba (BABA): Strong Cloud Growth, Mobile and Monetization - Jefferies
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Jefferies analyst, Jesse Guo, reiterated his Buy rating on shares of Alibaba (NYSE: BABA) after FY1Q17 results beat expectations on strong revenue growth and higher than expected margins. Mobile penetration and monetization improved while the cloud delivered strong growth indicating it could reach break even in the near term.
Key points in the quarter:
1) Revenue grew 58.8% yoy to RMB32.2bn, 5.4% and 6.7% above consensus
2) Active customers reached 434m (+18% yoy),
3) GMV grew 24% yoy to RMB837bn
4) GPM reached 66.3% (-5.5ppt yoy), due to consolidation of Youku and Lazada, and dilution from Tmall Supermarket
5) Non-GAAP net income grew 32.3% yoy to RMB12.6bn; 18% above consensus, partly due to lower product development expenses and exchange gains.
6) Non-GAAP net margin was 39.2%, -7.9ppt yoy due to GPM contraction and higher loss from equity investees.
The PT rises to $103 from $101.
Shares of Alibaba closed at $91.77 yesterday.
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