Analysts at Credit Suisse and Credit Suits said Alibaba had made “significant progress” in building out its clothing business and was on track to meet the target of building a “comparable” net profit for the year ending in June, and its apparel business is on track for $1 billion in sales.
“Alibaba has made significant progress in the last two quarters in building its apparel and footwear business,” the analysts said.
“The company is on course to achieve its target of a net profit of $1bn in the fiscal year ending June.
Alibaba’s apparel business and its footwear business are expected to achieve similar or better results.”
Credit Suis analysts said Alibaba was “finally in a position to achieve the long-held expectations of investors and market watchers”.
Alibaba has been one of China’s biggest technology companies since it was founded in 2003.
It is also the biggest listed clothing retailer on the China stock exchange.
It had a $3.3 billion market capitalisation at the end of the fiscal period.
The company said in its annual report on Monday that the global clothing market is expected to grow to $20 trillion in 2020.
The report said China had a “strong apparel industry” of about 3.5 billion people and about 30 million apparel brands.
Credit Suites analyst Daniel Dao said Alibaba’s “recovery in the apparel industry is likely to be more significant” than the $1 trillion figure.
“We believe Alibaba has the capability to double or even triple the size of its apparel market, and to achieve a net gain of $10-$15 billion in the year to June 2020,” Mr Dao wrote.
CreditSuisse analysts said the stock’s performance over the past 12 months had been “quite strong” but that there was a risk that “there could be some volatility”.
“Given the potential risks, we remain concerned that there may be some underperformance in the near term, as there are currently very little signs of a turnaround,” they wrote.