KAIYUAN SECURITIES·2025-08-31 04:04Investment Rating - The investment rating for Alibaba-SW (09988.HK) is "Buy" (maintained) [1][11]. Core Views - The report highlights that Alibaba is increasing its investment in flash sales, which is expected to enhance user traffic and contribute to revenue growth through technology service fees. The acceleration in cloud revenue growth is anticipated due to active investments in AI infrastructure [4][5]. - The adjusted net profit forecasts for FY2026-2028 have been revised down to 140.5 billion, 162.9 billion, and 189.8 billion CNY respectively, reflecting a year-on-year growth rate of -11.1%, +15.9%, and +16.5% [4][5]. Financial Performance Summary - For FY2026 Q1, Alibaba reported revenue of 247.65 billion CNY, a year-on-year increase of 2%, while non-GAAP net profit was 33.5 billion CNY, down 18% year-on-year, slightly below Bloomberg consensus estimates [5]. - The Chinese e-commerce segment saw a 10% year-on-year increase in customer management revenue, driven by technology service fees and improved penetration rates [5]. - The international digital commerce segment experienced a 19% year-on-year revenue growth, with a narrowing adjusted EBITA margin [5]. - The cloud intelligence group reported a 26% year-on-year revenue increase, with an adjusted EBITA margin of 8.8% [5]. Valuation Metrics - The report provides the following financial metrics for Alibaba: - Revenue (in million CNY) for FY2026E is projected at 1,081,043, with a year-on-year growth of 8.5% [7]. - Non-GAAP net profit for FY2026E is estimated at 140,536 million CNY, reflecting a year-on-year decline of 11.1% [7]. - The diluted EPS for FY2026E is projected at 7.6 CNY, with a P/E ratio of 13.8 [7].