Century Securities·2025-12-01 02:19Investment Rating - The report maintains an optimistic investment rating for the TMT industry, particularly highlighting Alibaba's capital expenditure guidance as a positive indicator for future growth [1]. Core Insights - Alibaba's Q3 2025 financial report shows total revenue of 247.8 billion yuan, a year-on-year increase of 5%, with a 15% growth rate when excluding divested businesses. The net profit attributable to ordinary shareholders was 20.99 billion yuan, down 52% year-on-year. Cloud business revenue reached 39.82 billion yuan, with a year-on-year growth rate of 34%, indicating a 5 percentage point increase from the previous quarter. AI-related product revenue has seen triple-digit growth for nine consecutive quarters, demonstrating the accelerating impact of AI on business operations [3][22]. - The capital expenditure for Q3 was 31.5 billion yuan, an 80% increase year-on-year. Over the past four quarters, Alibaba's capital expenditure in AI and cloud infrastructure exceeded 120 billion yuan, accounting for about one-third of the planned investment of 380 billion yuan over three years. Management expressed that the current internal cloud supply is not keeping pace with demand, suggesting that the investment plan may be conservative and could increase based on demand [3][22]. - The report emphasizes the potential for Alibaba to align with leading global cloud providers, as evidenced by the accelerating revenue growth in cloud services. The recent download milestone of over 10 million for the Qianwen app indicates a thriving ecosystem for Alibaba in both B2B and B2C sectors, suggesting a focus on domestic computing power and related industry chains [3][22]. Market Weekly Review - The TMT sector's performance for the week of November 24-28 showed significant gains, with telecommunications up 8.70%, electronics up 6.05%, media up 4.23%, and computers up 3.08%, outperforming the CSI 300 index, which rose by 1.64%. The top-performing sub-industries included communication network equipment and devices (up 12.14%), printed circuit boards (up 8.87%), and optical components (up 8.75%) [3][5]. Industry News and Key Company Announcements - The report highlights several key events in the AI sector, including the release of the DeepSeek-Math-V2 model, which has shown significant performance improvements in international mathematics competitions. This model represents a shift towards rigorous reasoning processes, reducing error rates significantly [3][16]. - Notable announcements include Alibaba's Qianwen app surpassing 10 million downloads, making it the fastest-growing AI application, and the launch of new AI products by various companies, indicating a robust competitive landscape in AI applications [3][19]. Company Announcements - Alibaba's management expressed confidence in the strong demand for AI services, noting that the current pace of cloud server deployment is lagging behind order growth. The backlog of orders continues to expand, indicating significant future growth potential in AI [3][23]. - Other companies in the sector, such as Adata, reported severe memory shortages due to surging AI demand, predicting that this trend will continue for at least two to three more quarters [3][23].