BABA(HK:09988) Shenwan Hongyuan Securities·2026-01-14 07:59Investment Rating - The investment rating for Alibaba (BABA) is "Buy" with a target price of 167.01 CNY, indicating a strong performance relative to the market [31]. Core Insights - The rise of AI search is transforming the information acquisition landscape, leading to a shift from traditional search engines to AI-driven search models. This transition is characterized by a change in user behavior from "search-click" to "ask-direct answer" [2][5]. - Generative Engine Optimization (GEO) is emerging as a new marketing paradigm, focusing on enhancing the visibility and recommendation probability of brands within AI-generated content. This approach contrasts with traditional SEO, which relied heavily on click-based competition [2][5]. - The global GEO market is projected to exceed 12 billion USD by 2025, with a compound annual growth rate (CAGR) of 145%. The Chinese market is expected to reach 48 billion CNY (approximately 6.65 billion USD), accounting for 55.4% of the global market share [2][25]. Summary by Sections 1. Decoding GEO: Why Alibaba is a Core Beneficiary - AI search is rapidly gaining traction, causing traditional search engines to lose market share. As of June 2025, the user base for traditional search engines in China was 777 million, down 10 percentage points from December 2024, while generative AI products saw a user base of 515 million, up 26.6% [5]. - The introduction of GEO is reshaping marketing strategies by focusing on optimizing content for AI preferences, thus enhancing the likelihood of being referenced in AI-generated answers [2][18]. 2. Commercialization Acceleration: "AI + E-commerce" as the Best Application Outlet - The GEO market is entering a phase of rapid expansion, with significant contributions from China. The market is still in its early stages, with many domestic GEO service providers relying on self-developed AI engines for precise marketing optimization [25][27]. - Alibaba's strategy to integrate AI applications with its e-commerce ecosystem positions it well to leverage the ongoing shift towards AI-driven marketing and consumer engagement [28].