Changjiang Securities·2025-11-26 12:45Investment Rating - The investment rating for Alibaba is "Buy" and is maintained [8][9]. Core Insights - The recent financial report highlights several strengths: first, the controllable investment in Taobao Flash Sale has significantly boosted the main site, with expectations for continued improvement in user experience (UE) through scale effects and operational efficiency optimization. Second, the cloud business is experiencing sustained acceleration in growth, with potential for high growth momentum in the future. From a medium to long-term perspective, investments in instant retail are expected to drive high-frequency consumer spending, while the cloud business opens a second growth curve. Overall, the report is optimistic about the company's investment opportunities, projecting Non-GAAP net profits of 109.5 billion, 167.2 billion, and 195.4 billion yuan for FY2026-2028 [2][8]. Financial Performance Summary - For FY2026Q2, the company reported revenue of 247.8 billion yuan, a year-on-year increase of 5%. Excluding the disposed businesses of Sun Art Retail and Intime, revenue grew by 15%. Operating profit reached 5.4 billion yuan, down 85% year-on-year, while Non-GAAP net profit was 10.4 billion yuan, a decrease of 72% [6][8]. - The EBITA for the Chinese e-commerce group was 10.5 billion yuan, down 76% year-on-year, primarily due to profitability pressure from investments in instant retail. However, the main e-commerce site saw customer management revenue grow by 10% year-on-year, driven by increased penetration and traffic from instant retail [10]. - Instant retail revenue reached 22.9 billion yuan, a year-on-year increase of 60%, with significant improvements in unit economics since September [10]. - Alibaba Cloud's revenue grew by 34% year-on-year, with a stable EBITA margin. The growth is largely attributed to AI-driven products, which have seen triple-digit year-on-year growth for nine consecutive quarters [10]. Financial Forecast - The financial forecast for Alibaba indicates projected revenues of 1,051.9 billion yuan for FY2026, 1,215.6 billion yuan for FY2027, and 1,364.5 billion yuan for FY2028. Non-GAAP net profits are expected to be 109.5 billion yuan for FY2026, 167.2 billion yuan for FY2027, and 195.4 billion yuan for FY2028 [11].