Core Viewpoint - The article discusses the contrasting performance of the US stock market and Hong Kong stocks, highlighting the rise of Chinese technology companies and the emergence of the "Terrific 10" as key players in the market [3][4]. Group 1: Market Performance - Since the beginning of the year, the US stock market has underperformed due to high valuations, liquidity outflows, and the rise of AI in China, while Hong Kong stocks have shown strong performance [3]. - The launch of OpenAI's ChatGPT-4 in March 2023 marked the beginning of a significant AI wave, leading to a surge in the US stock market driven by major tech companies [3]. - The introduction of China's AI DeepSeek R1 in January 2025 has further intensified competition in the AI space, contributing to the resurgence of the Hang Seng Tech Index [3][4]. Group 2: Hang Seng Tech Index - The Hang Seng Tech Index serves as a key indicator for the technology sector in Hong Kong, encompassing a wide range of industries including industrials, consumer discretionary, healthcare, finance, and consulting technology [7]. - The index includes companies that meet specific criteria related to technology utilization, R&D spending, and revenue growth, ensuring a focus on innovative firms [8]. - The index has a total of 30 constituent stocks with a combined market capitalization exceeding 14 trillion, indicating a strong presence in the market [10]. Group 3: Industry Distribution and Weighting - The top six industries within the Hang Seng Tech Index include professional retail (22.8%), information technology equipment (16.42%), software services (16.18%), automotive (10.79%), media and entertainment (10.57%), and semiconductors (10.00%), collectively accounting for 86.80% of the index [12]. - The top ten constituents of the index represent 70.94% of the total weight, showcasing a diverse range of sectors including internet, software, and automotive [13]. - The overall valuation of the index is considered normal, with a PE ratio of 24.19, indicating potential investment opportunities [14][15]. Group 4: Future Outlook - The current AI wave is still in its early stages, with significant impacts expected in sectors such as semiconductors, AI, robotics, and the broader internet [17]. - The article emphasizes the importance of long-term investment strategies in the face of market volatility, particularly in the context of the evolving technology landscape in China [16][17].

Investment Rating - The report maintains a "Buy" rating for Alibaba Group (09988) with a target price not specified [5]. Core Insights - Alibaba reported FY25Q3 revenue of 280.2 billion yuan, exceeding Bloomberg consensus by 1.0%. Adjusted EBITA was 54.9 billion yuan, surpassing expectations by 2.4%. Adjusted net profit reached 51.1 billion yuan, exceeding expectations by 10.7% [1]. - The company has initiated a share buyback program, repurchasing 119 million shares for a total of 1.3 billion USD, with an authorized remaining amount of 20.7 billion USD as of December 31, 2024 [1]. - Capital expenditures (Capex) for FY25Q3 were 31.8 billion yuan, exceeding Bloomberg consensus by 106%. The company anticipates that Capex over the next three years will exceed the total of the past decade, with a planned investment of 380 billion yuan in cloud computing and AI infrastructure [1]. Business Segment Summaries Taobao Tmall Group - Revenue for FY25Q3 was 136.1 billion yuan, exceeding Bloomberg consensus by 3.3%. Adjusted EBITA was 61.1 billion yuan, surpassing expectations by 4.4% [2]. - Customer management revenue grew by 9% year-on-year, driven by online GMV growth and increased pricing. The number of 88VIP members grew to 49 million, continuing to drive subscription growth through enhanced services [2]. Cloud Intelligence Group - Revenue for FY25Q3 was 31.7 billion yuan, with adjusted EBITA of 3.1 billion yuan, exceeding expectations by 10.9%. The overall revenue grew over 11% year-on-year, primarily driven by double-digit growth in public cloud services [3]. AIDC (AliExpress) - Revenue for FY25Q3 was 37.8 billion yuan, with an adjusted EBITA loss of 5 billion yuan due to increased investments during the overseas shopping season [4]. - The company plans to establish a joint venture with South Korea's Shinsegae to operate AliExpress Korea and Gmarket [4]. Other Businesses - Cainiao generated revenue of 28.2 billion yuan with an adjusted EBITA of 240 million yuan. Local life services revenue was 17 billion yuan, with an adjusted EBITA loss of 600 million yuan, primarily driven by growth in orders from Gaode and Ele.me [4]. Financial Projections - Revenue projections for Alibaba for FY 2025-2027 are 992.9 billion yuan, 1,081.5 billion yuan, and 1,180.2 billion yuan respectively. Adjusted net profit estimates for the same period are 147.1 billion yuan, 184.8 billion yuan, and 200.8 billion yuan [5].