BABA(US:BABA) Hua Er Jie Jian Wen·2025-11-26 07:29Core Viewpoint - Morgan Stanley indicates that despite a short-term slowdown in core e-commerce growth, Alibaba's investment logic is supported by robust growth in Alibaba Cloud [1][4]. Alibaba Cloud Performance - Alibaba Cloud is experiencing strong industry demand, with management stating that current demand exceeds supply. The three-year capital expenditure guidance of 380 billion RMB may be insufficient to meet current customer needs [1][5]. - The third fiscal quarter (Q4) revenue for Alibaba Cloud is expected to grow by 35%, with a further increase to 36% in the fourth fiscal quarter (next Q1) [1][5]. - New AI applications, such as Quark AI Assistant and Tongyi Qianwen, are anticipated to further enhance user adoption rates [1][5]. - Alibaba Cloud's revenue for the second fiscal quarter reached 39.824 billion RMB, a year-on-year increase of 34.5%, with an adjusted EBITA of 3.604 billion RMB and a profit margin of 9.0%, exceeding Morgan Stanley's previous expectations [5]. E-commerce Business Outlook - The core e-commerce business is expected to see a slowdown in growth to 7.5% due to a weak macro environment [1][6]. - Online retail sales growth further slowed to 5% in October, with package volume decreasing from low double-digit growth in September to 8% in October, which is expected to negatively impact GMV and core e-commerce revenue [6]. - The adjusted EBITA for the Chinese e-commerce group in the second fiscal quarter was 10.497 billion RMB, a year-on-year decline of 76.3%, primarily due to rapid business investments [6]. - The losses in the Cainiao business are expected to narrow to 25 billion RMB in the third fiscal quarter, aligning with market expectations [1][6]. - Morgan Stanley has revised its expectations for Cainiao's losses down from 37 billion RMB to 25 billion RMB, indicating better-than-expected performance [6].