Orient Securities·2026-01-14 13:59Investment Rating - The report maintains a "Buy" rating for Alibaba [5][11] Core Insights - AI-driven growth in Alibaba Cloud is expected to continue, while e-commerce faces pressure with flash sales showing steady loss reduction. The company's large consumption strategy is progressing in a coordinated manner [4][10] - The forecast for Alibaba's revenue for FY2026-2028 is adjusted to 1,030.7 billion, 1,143.2 billion, and 1,251.8 billion CNY respectively, with adjusted net profits of 91.6 billion, 135.8 billion, and 176.1 billion CNY [4][14] - The target price is set at 207.7 HKD, based on a market capitalization of 35,656 billion CNY [4][14] Revenue and Profit Forecast - For FY2026, total revenue is projected at 1,030.7 billion CNY, with a year-on-year growth of 3.45%. The adjusted net profit is expected to be 91.6 billion CNY, reflecting a decrease of 13.21% year-on-year [13][15] - The revenue from Alibaba Cloud is anticipated to reach 434.9 billion CNY in FY26Q3, representing a year-on-year increase of 37.0% [10][15] E-commerce Performance - The e-commerce segment is projected to generate 1,054.8 billion CNY in FY26Q3, with a year-on-year growth of 3.4%. However, the growth rate is expected to slow down due to high base effects and policy impacts [10][15] - The flash sales segment is estimated to incur a loss of approximately 21.5 billion CNY in FY26Q3, with a single average loss of 3.7 CNY [10][15] Cloud Intelligence Group - The Cloud Intelligence Group is expected to accelerate further, driven by AI demand, with external revenue showing significant growth [10][15] - The report highlights Alibaba's unique position as the only full-stack AI cloud provider in China, which is expected to enhance its revenue and profit potential [10][15] Other Business Segments - The AIDC segment is projected to continue reducing losses, with an expected loss of 1.89 billion CNY in FY26Q3 due to increased investment in promotional activities [10][15] - The report emphasizes the potential for Alibaba's C-end AI applications to drive user growth and enhance the overall AI ecosystem [10][15]