BABA(US:BABA) Minsheng Securities·2025-05-21 11:27Investment Rating - The report maintains a "Recommended" rating for the companies involved, indicating a positive outlook for their stock performance relative to the benchmark index [4][5]. Core Insights - Major cloud service providers are significantly increasing their capital expenditures, reflecting the vast potential of the AI industry and the expected benefits for core computing power and upstream technology infrastructure [1][2][3]. - Alibaba's capital expenditure in Q1 2025 reached 24.612 billion yuan, a year-on-year increase of 120.68%, while Tencent's capital expenditure for the same period was 27.5 billion yuan, up 91% year-on-year, primarily focused on AI-related long-term strategies [1][2][3]. - Alibaba's "繁花计划" aims to invest in infrastructure and applications over the next three years, targeting a market expansion of 10 billion yuan and serving one million cloud customers [2]. - Tencent plans to maintain a high level of capital expenditure in 2025, with expectations that it will account for a low double-digit percentage of its revenue, further enhancing its AI product capabilities [3]. Summary by Sections Capital Expenditure Trends - Alibaba's capital expenditure commitment for Q1 2025 was 45.321 billion yuan, significantly up from 18.372 billion yuan in Q1 2024, indicating strong ongoing investment in cloud and AI infrastructure [2]. - Tencent's total capital expenditure for 2024 was 76.8 billion yuan, a substantial increase of 221% year-on-year, showcasing its commitment to AI and cloud infrastructure [3]. AI Ecosystem Development - Alibaba is focusing on building a full-stack leading technology in AI and accelerating the implementation of AI in various industries, with a reported 18% year-on-year revenue growth in cloud computing and AI-related services [2]. - Tencent is enhancing the integration of AI across its diverse business sectors, aiming for comprehensive penetration of its mixed models in both consumer and business markets [3]. Investment Opportunities - The report suggests focusing on several sectors benefiting from the increased capital expenditure in AI and cloud infrastructure, including: - Computing chips: SMIC, Haiguang Information, Cambricon, Chipone, Yuntian Lifei, Aojie Technology - Servers: Huaqin Technology, Lenovo Group, Inspur Technology, Hongxin Electronics - Power supplies: Hewei Electric, Megmeet, Zhongheng Electric, Taijia Co., Kotec Power, Weichai Heavy Industry, Kehua Data, Oulu Tong, Aohai Technology - Temperature control: Shenling Environment, InvoTech, Sulian Co., Chuanhuan Technology - Other supply chains: Demingli, Changguang Huaxin, Jiewate, Huahai Chengke, Huafeng Technology, Xingsen Technology [4].