GOLDEN SUN SECURITIES·2026-03-23 03:29Investment Rating - The report maintains a "Buy" rating for Alibaba Group [4][6] Core Views - Alibaba's total revenue for FY2026 Q3 reached 284.8 billion yuan, a year-on-year increase of 2%. However, the non-GAAP net profit decreased by 67% to approximately 17.1 billion yuan [1] - The report highlights the strategic investments in AI and the restructuring of the AI matrix, which are expected to enhance long-term profitability [3] - The company aims for a significant growth in its instant retail segment, targeting an overall transaction scale exceeding 1 trillion yuan by FY2028 [2] Financial Performance Summary - Revenue Breakdown: - Chinese e-commerce generated 159.3 billion yuan, up 6% year-on-year, with adjusted EBITA down 43% to approximately 34.6 billion yuan [1] - International commerce recorded 39.2 billion yuan, a 4% increase, with adjusted EBITA losses narrowing by 59% [1] - Alibaba Cloud achieved 43.3 billion yuan in revenue, growing 36% year-on-year, with adjusted EBITA increasing by 25% to about 3.9 billion yuan [1] - Other businesses saw a revenue decline of 25% to 67.3 billion yuan, with adjusted EBITA losses widening by 208% [1] - Future Revenue Projections: - Expected revenues for FY2026, FY2027, and FY2028 are projected at 1,029.5 billion yuan, 1,136.5 billion yuan, and 1,248.5 billion yuan respectively [4] - Non-GAAP net profits are forecasted to be 86.6 billion yuan, 128.8 billion yuan, and 169.3 billion yuan for FY2026, FY2027, and FY2028 respectively [4] - Valuation Metrics: - The report assigns a target price of 168 HKD for Alibaba (9988.HK) and 172 USD for Alibaba (BABA.N), based on various valuation multiples [4]