BABA(US:BABA) Zhao Yin Guo Ji·2025-08-07 02:42Macro Economic Overview - The US economy shows signs of stagnation with July's service PMI nearly flat, indicating a slowdown in business activity and order demand [2] - Manufacturing PMI has dropped to a near one-year low, with employment contraction reaching a new high, while price expansion has slowed but remains significantly above post-pandemic averages [2] - Import indices and inventories are contracting, suggesting the end of a purchasing spree to avoid tariffs [2] Industry Insights - The cloud services sector is experiencing accelerated revenue growth among leading US cloud providers, with Amazon AWS, Google Cloud, and Microsoft Azure showing a combined year-on-year revenue growth of 23% in Q2 2025 [6] - Capital expenditure among leading cloud firms is being adjusted upwards due to strong demand, although supply constraints are expected to persist for the next six months [6] - AI-related capital investments are impacting profit margins, but operational efficiencies in core businesses are helping to mitigate these effects [6] Company Analysis - Xiaomi Group is expected to report strong Q2 2025 results, with revenue and adjusted net profit projected to grow by 32% and 66% year-on-year, reaching RMB 117 billion and RMB 10.3 billion respectively [7] - The growth drivers for Xiaomi include robust smartphone sales, strong demand for electric vehicles, and favorable policies for IoT [7] - The target price for Xiaomi is set at HKD 66.0, reflecting a P/E ratio of 34.4 for 2025 [7] Focus Stocks - Geely Automobile (175 HK) is rated as a buy with a target price of HKD 24.00, indicating a potential upside of 31% [8] - Luckin Coffee is also rated as a buy with a target price of USD 44.95, suggesting an 18% upside [8] - Tencent (700 HK) is rated as a buy with a target price of HKD 660.00, indicating a 16% potential increase [8]