Ge Long Hui·2025-11-26 06:41Core Insights - Alibaba reported a solid FY2Q26 performance with total revenue of RMB247.8 billion, a 5% year-over-year increase, slightly above market expectations [1] - The company's Cloud Intelligence Group revenue grew 34% year-over-year, exceeding consensus estimates, while international digital commerce showed a 10% increase [1][2] - Adjusted EBITA dropped significantly by 77.6% year-over-year, primarily due to increased investments in quick commerce, although the overall outcome was better than feared due to strong cloud and AIDC performance [1][2] Revenue Performance - Alibaba's total revenue reached RMB247.8 billion, surpassing the consensus of RMB245.2 billion [1] - The Alibaba China E-commerce Group revenue grew 16% year-over-year to RMB132.6 billion, with customer management revenue rising 10% to RMB78.9 billion [1] - Cloud revenue increased by 34% year-over-year to RMB39.8 billion, ahead of the consensus of RMB37.93 billion [1][2] - International Digital Commerce revenue grew 10% year-over-year to RMB34.8 billion, below the consensus of RMB37.2 billion [1] Profitability and Margins - Non-GAAP net income to ordinary shareholders fell 71.3% year-over-year to RMB10.5 billion, which was 23% below consensus [1] - Adjusted EBITA decreased by 77.6% year-over-year to RMB9.07 billion, exceeding the consensus estimate of RMB6.87 billion [1] Cloud Business Insights - Cloud revenue growth accelerated to 34% year-over-year, with external customer revenue up 29% and internal customer revenue up 53% [2] - AI revenue now accounts for approximately 20% of external cloud revenue, marking the ninth consecutive quarter of triple-digit AI revenue growth [2] - The EBITA margin remained stable at 9%, reflecting ongoing strategic investments in AI [2] Capital Expenditure and Strategy - Alibaba's quarterly capital expenditure rose 80% year-over-year to RMB32 billion, contrasting with Tencent's decline [3] - The company aims to strengthen its AI infrastructure and full-stack capabilities, similar to global leaders like Google [3] E-Commerce and Quick Commerce - Customer management revenue in e-commerce grew 10% year-over-year, but management noted potential deceleration in growth due to competition and user investment intensity [4] - Quick commerce recorded an EBITA loss of approximately RMB36.4 billion in FY2Q26, but improvements in unit economics are expected to narrow losses in FY3Q26 [5] Valuation Insights - Alibaba's current trading price implies an enterprise value of US$356 billion, with consensus EBITDA forecasts suggesting potential upside [6] - The valuation gap compared to peers indicates meaningful upside potential if Alibaba can stabilize e-commerce profitability and improve visibility on quick-commerce losses [6]