Core Viewpoint - Concerns are rising about the potential formation of an AI bubble, highlighted by warnings from the Bank of England and the International Monetary Fund [1] Group 1 - The Bank of England has issued warnings regarding the risks associated with the rapid growth of AI technologies [1] - The International Monetary Fund has also expressed concerns about the sustainability of the current AI investment trends [1]

Group 1: Market Overview - Hong Kong stocks have experienced significant volatility entering the fourth quarter, with the Hang Seng Index declining for five consecutive days and the Hang Seng Tech Index dropping over 3% [1] - Major internet stocks such as Alibaba, Tencent, Bilibili, Xiaomi, and Meituan have all seen declines, with Alibaba falling by 4.56% [1] - The Hong Kong Internet ETF (513770) opened lower but showed strong buying interest, closing down 3.41% while maintaining a wide premium [1] Group 2: Economic Indicators and Forecasts - There is a divergence in expectations regarding the Federal Reserve's future interest rate cuts, with officials indicating a cautious approach to rate adjustments [2] - Alibaba's investments in AI and instant retail have led to lowered earnings expectations, impacting market sentiment, although long-term growth prospects remain positive [2] - Analysts believe that the fourth quarter will be crucial for establishing a new bull market in Hong Kong stocks, influenced by factors such as US-China negotiations and the Federal Reserve's interest rate decisions [2] Group 3: Capital Flows and Investment Trends - The outlook for Hong Kong stocks is optimistic due to improving fundamentals and capital inflows, particularly from foreign investors and southbound funds [3] - Southbound capital has seen a record net inflow of 1.17 trillion HKD this year, with major internet stocks like Alibaba and Tencent receiving significant investments [3] - The Hong Kong Internet ETF has seen substantial net inflows, indicating strong investor confidence despite market volatility [3][10] Group 4: Sector Performance and Valuation - The Hong Kong Internet sector has shown resilience, with the China Securities Index for Hong Kong Internet stocks outperforming the Hang Seng Tech Index [8] - The current price-to-earnings ratio for the Hong Kong Internet Index is 26.69, which is lower than both US and A-share tech valuations, suggesting potential for growth [8] - The top three holdings in the Hong Kong Internet ETF are Alibaba, Tencent, and Xiaomi, which collectively account for over 46% of the fund's weight [6]

Core Viewpoint - Alibaba's 2QFY26 non-GAAP net profit is expected to fall below consensus estimates due to increased investment in flash sales and expanded losses in other businesses [1][2] Group 1: Revenue and Profit Forecast - 2QFY26 revenue is projected to grow by 3.8% year-on-year to 245.5 billion yuan, while adjusted EBITA is expected to decline by 83% year-on-year to 7.1 billion yuan [1] - Cloud computing revenue is anticipated to accelerate with a year-on-year growth of 30%, up from 26% in the previous quarter, and cloud EBITA margin is expected to be 9.0% [1] - The company has adjusted its FY26 revenue forecast down by 1% to 1,061.5 billion yuan and lowered FY26 and FY27 non-GAAP net profit estimates by 17% and 4% to 101.2 billion yuan and 143.8 billion yuan, respectively [2] Group 2: Flash Sales and E-commerce Performance - Flash sales (including food delivery and instant retail) are expected to incur an EBITA loss of 36.5 billion yuan, which is higher than previous expectations [2] - Customer management revenue is projected to grow by 10% year-on-year, contributing 2-3% to the growth rate from flash sales [2] - The gross merchandise volume (GMV) is expected to increase by 5.7%, and excluding flash sales losses, e-commerce EBITA is expected to show positive year-on-year growth [2] Group 3: Other Business Segments - AIDC is expected to break even in adjusted EBITA, maintaining a profit-first strategy amid uncertain external conditions [2] - Other business losses are projected to reach 5 billion yuan, primarily due to increased investments in model training, AI applications, and local services [2] Group 4: Valuation and Target Price - The company is currently trading at 30x and 21x FY26 and FY27 non-GAAP P/E ratios [2] - The target prices are maintained at $204 for US shares and HK$197 for Hong Kong shares, indicating an upside potential of 11% and 13% respectively from current prices [2]

Core Viewpoint - The company is expected to see a revenue growth of approximately 11.55% in the current quarter, driven by cross-selling from flash sales and improvements in advertising efficiency due to AI [1][2] - Adjusted EBITA is projected to decline by 72.58% to 12.211 billion yuan, primarily due to losses from flash sales, which are estimated at around 35 billion yuan [1][2] E-commerce Group - Revenue growth for the e-commerce group is anticipated to be around 11.55%, with CMR growth at approximately 10.04%, continuing to outpace GMV growth [2] - The adjusted EBITA is expected to decrease by 72.58% to 12.211 billion yuan, largely impacted by flash sales investments [2] - Flash sales are projected to focus on increasing order volume in Q3 and reducing losses while expanding in-store business in Q4 [2] - The synergy from flash sales is expected to positively impact traditional e-commerce operations, potentially serving as an alternative for brand advertising [2] Cloud Intelligence Group - Revenue growth for the cloud intelligence group is expected to be around 30%, with an adjusted EBITA margin of approximately 9%, remaining stable year-on-year [3] - The company is actively advancing a 380 billion yuan AI infrastructure project and plans to increase investments to prepare for the ASI era [3] - By 2032, the energy consumption of Alibaba Cloud's global data centers is projected to increase tenfold compared to 2022, indicating a significant rise in computing power investments [3] - Collaborations with mobile manufacturers like Honor and Apple are anticipated to create new traffic entry points for the company's ecosystem [3] Profit Forecast and Valuation - Revenue growth for FY2026 and FY2027 is projected at 3.30% and 11.11%, respectively, with Non-GAAP net profits expected to be 121.73 billion yuan and 162.61 billion yuan [4] - The estimated valuation for the e-commerce group and cloud intelligence group per ADS is 145.67 USD and 71.04 USD, respectively, with a target price of 216.72 USD per ADS [4]

Core Insights - On October 10, 2025, Alibaba-W (09988), SMIC (00981), and Tencent Holdings (00700) were the top three companies by trading volume in the southbound trading of the Stock Connect, with trading amounts of 140.49 billion, 86.63 billion, and 42.68 billion respectively [1][2] - In the southbound trading of the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), SMIC (00981), and Tencent Holdings (00700) also ranked as the top three, with trading amounts of 77.88 billion, 48.07 billion, and 26.41 billion respectively [1][2] Southbound Trading Highlights - The top three active companies in the southbound trading of the Shanghai-Hong Kong Stock Connect were: - Alibaba-W (09988): 140.49 billion with a net buy of -13.44 billion - SMIC (00981): 86.63 billion with a net buy of -14.69 billion - Tencent Holdings (00700): 42.68 billion with a net buy of -11.60 billion [2] - The top three active companies in the southbound trading of the Shenzhen-Hong Kong Stock Connect were: - Alibaba-W (09988): 77.88 billion with a net buy of -4.67 billion - SMIC (00981): 48.07 billion with a net buy of -12.39 billion - Tencent Holdings (00700): 26.41 billion with a net buy of +2.09 billion [2]

Summary of Key Points Core Viewpoint - The Hong Kong stock market experienced a net sell-off of 3.99 billion HKD from northbound trading, with significant movements in various stocks, indicating a shift in investor sentiment and trading strategies. Group 1: Northbound Trading Activity - Northbound trading saw a net sell of 12.2 billion HKD in the Shanghai-Hong Kong Stock Connect and a net buy of 8.21 billion HKD in the Shenzhen-Hong Kong Stock Connect [1] - The most bought stocks included Xiaomi Group-W (01810), Pop Mart (09992), and ZTE Corporation (00763) [1] - The most sold stocks were SMIC (00981), Alibaba-W (09988), and Hua Hong Semiconductor (01347) [1] Group 2: Stock-Specific Insights - Xiaomi Group-W (01810) had a net buy of 9.33 billion HKD, with a reported increase in electric vehicle deliveries to over 40,000 units in September, up from 36,000 in August [4] - Pop Mart (09992) received a net buy of 6.69 billion HKD, with new product launches selling out quickly and expectations for strong sales during upcoming festive seasons [5] - ZTE Corporation (00763) saw a net buy of 4.9 billion HKD, with analysts highlighting its unique position in providing end-to-end communication solutions and potential benefits from AI development [5] Group 3: Notable Sell-offs - Alibaba-W (09988) faced a net sell of 18.1 billion HKD, while Tencent (00700) experienced a net sell of 9.51 billion HKD, reflecting concerns over market valuations and potential corrections [6] - SMIC (00981) and Hua Hong Semiconductor (01347) were sold off significantly, with net sells of 27.08 billion HKD and 11.44 billion HKD respectively, attributed to high static P/E ratios leading to adjustments in margin financing [6]

Group 1 - Southbound funds recorded a net sell of HKD 399 million in Hong Kong stocks today [1] - Notable net purchases included Xiaomi Group-W at HKD 933 million, Pop Mart at HKD 669 million, and ZTE Corporation at HKD 490 million [1] - Significant net sells were observed in SMIC at HKD 2.709 billion, Alibaba-W at HKD 1.81 billion, and Tencent Holdings at HKD 951 million [1] Group 2 - Southbound funds have continuously net bought Xiaomi for 5 days, totaling HKD 3.82084 billion [1] - There has been a consecutive 2-day reduction in holdings for SMIC, amounting to HKD 5.105 billion [1] - A similar trend of reduction was noted for Hua Hong Semiconductor, with a total decrease of HKD 2.286 billion over 2 days [1]

每经AI快讯，10月10日，南向资金净卖出3.99亿港元。其中，小米集团、泡泡玛特、中兴通讯净买入额 位列前三，分别获净买入9.33亿港元、6.7亿港元、4.91亿港元；中芯国际、阿里巴巴、华虹半导体分别 遭净卖出27.09亿港元、18.1亿港元、11.45亿港元。 ...

南向资金净卖出3.99亿港元。其中小米集团-Ｗ、泡泡玛特、中兴通讯净买入额位列前三，分别获净买 入9.33亿港元、6.7亿港元、4.91亿港元。净卖出方面，中芯国际、阿里巴巴-W、华虹半导体分别遭净 卖出27.09亿港元、18.1亿港元、11.45亿港元。 (本文来自第一财经) ...

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