Core Viewpoint - Alibaba is expected to report a revenue growth of 2% year-on-year for Q1 FY26, with an adjusted EBITA margin of 16% [2][3] Revenue and Growth Projections - The anticipated revenue for Q1 FY26 is 247.8 billion, reflecting a 2% year-on-year increase, with growth rates for various segments as follows: Taotian at 9%, International Digital Commerce at 19%, Cloud Intelligence Group at 22%, Local Life at 10%, Cainiao at -5%, and Big Entertainment at 5% [2][3] - The slowdown in revenue growth is primarily attributed to the divestiture of Gaoxin Retail and Intime [3] Segment Analysis - Taotian Group is projected to achieve a GMV growth of 6% year-on-year, with a CMR increase of 11%, driven by site-wide promotions and a 0.6% contribution from technology service fees [2] - The Cloud segment is expected to accelerate with a revenue growth of 22% year-on-year, supported by increasing AI demand [2] - AIDC is forecasted to grow by 19% year-on-year, with a decrease in adjusted EBITA margin by 6%, but a significant reduction in losses [2] Profitability and Investment Impact - The adjusted EBITA for Q1 FY26 is estimated at 39.2 billion, reflecting a year-on-year decrease of 13% and a margin decline of 3 percentage points [3][4] - Increased investment in instant retail is expected to pressure short-term profits but may enhance user engagement and purchase frequency in the long term [4] Future Revenue and Profit Adjustments - Revenue forecasts for FY2026 to FY2028 have been slightly adjusted to 1,062.3 billion, 1,149.0 billion, and 1,217.4 billion respectively, with adjustments of +1.0%, +2.2%, and +0.8% [4] - Net profit forecasts for FY2026 to FY2028 have been revised to 138.8 billion, 171.8 billion, and 195.4 billion respectively, with adjustments of -16.8%, -5.7%, and -2.9% [4] Valuation - The company is currently valued at a PE ratio of 13 times for FY2026, maintaining an "outperform" rating [4]

Investment Rating - The investment rating for the company is "Outperform the Market" [2][7]. Core Views - The company is expected to report a revenue growth of 2% year-on-year for Q1 FY26, with an adjusted EBITA margin of 16%. The revenue growth is primarily impacted by the divestiture of certain retail operations [4][6]. - The company is increasing its investment in instant retail, which is expected to pressure profits in the short term but may enhance user engagement and purchase frequency in the long term [5][23]. - Revenue forecasts for FY2026 to FY2028 have been slightly adjusted upwards, while net profit forecasts have been adjusted downwards due to increased investment in flash sales [5][23]. Summary by Sections Financial Performance - For Q1 FY26, the company is projected to achieve a revenue of CNY 247.8 billion, reflecting a 2% year-on-year increase. The revenue growth rates for various segments are as follows: Taobao +9%, International Digital Commerce +19%, Cloud Intelligence +22%, Local Services +10%, Cainiao -5%, and Digital Entertainment +5% [4][6]. - The adjusted EBITA for Q1 FY26 is expected to be CNY 39.2 billion, with a year-on-year decline of 13% [6]. Segment Analysis - **Taobao Group**: Projected GMV growth of 6% year-on-year for Q1 FY26, with a CMR increase of 11% driven by site-wide promotions and a 0.6% contribution from service fees. The EBITA for Taobao and Local Services combined is expected to decline by 16% to CNY 40.8 billion due to increased promotional spending [11]. - **Cloud Intelligence**: Anticipated revenue growth of 22% year-on-year for Q1 FY26, driven by rising AI demand. The company continues to advance its AI initiatives, including the launch of the Qwen3 model [15][16]. - **AIDC**: Expected revenue growth of 19% year-on-year, with a slight decline in adjusted EBITA margin due to strategic decisions to enhance profitability [22]. Financial Projections - Revenue forecasts for FY2026, FY2027, and FY2028 are adjusted to CNY 1,062.3 billion, CNY 1,149.0 billion, and CNY 1,217.4 billion respectively, reflecting increases of 1.0%, 2.2%, and 0.8% [5][23]. - Adjusted net profit forecasts for the same period are revised to CNY 138.8 billion, CNY 171.8 billion, and CNY 195.4 billion, with adjustments of -16.8%, -5.7%, and -2.9% respectively [5][23].

Core Viewpoint - The launch of "Deep Search" by Quark represents a significant step towards exploring a universal agent, enhancing the search experience through advanced AI capabilities [4][26]. Group 1: Evolution of Search Technology - The evolution of search technology has fundamentally changed how humans access information, with a persistent reliance on search despite the transition from web to app [2]. - The introduction of AI search marks a leap forward, integrating generative answers with traditional search results to improve clarity and relevance [3][4]. - Deep Search builds on Retrieval-Augmented Generation (RAG) technology, allowing for iterative cycles of searching, reading, and reasoning to achieve optimal answers [7][9]. Group 2: Features of Deep Search - Deep Search is characterized by its "high emotional intelligence," understanding user intent and generating reliable results [10][11]. - The system analyzes user queries deeply, breaking down complex tasks and providing comprehensive answers, unlike traditional keyword-based searches [12][16]. - It excels in personalized, complex, and vague queries, offering tailored solutions that traditional search engines struggle to provide [20][21]. Group 3: Commercial Implications - The timing for a transformation in commercial search is ripe, with Quark's Deep Search positioned to compete with traditional search engines [9]. - The system enhances information retrieval efficiency by over 40% and reduces information bias through multi-dimensional cross-validation [22]. - Quark's AI Super Box, launched earlier, has set the stage for a new user experience in search, with Deep Search being a crucial component of this strategy [24][25]. Group 4: Future Developments - Quark plans to further enhance Deep Search with a PRO version, capable of delivering professional-level analysis and structured results in minutes [25]. - The company is redefining the value chain of search services, moving towards a comprehensive agent ecosystem that integrates various vertical agents [26].

Core Insights - The article discusses the evolution of AI applications, particularly focusing on Alibaba's Quark and its new "Deep Search" feature, which aims to address the limitations of traditional search methods and enhance user experience through deep reasoning and intelligent retrieval [2][3][4]. Group 1: AI Application Development - Quark has launched the first "Deep Search" product in China, targeting a user base of over 100 million, aiming to solve complex problems through advanced AI capabilities [2][4]. - The transition from traditional search to AI-driven search signifies a new era in the search industry, where companies must redefine their positions to meet evolving user needs [3][4]. Group 2: Deep Search Functionality - Deep Search utilizes Alibaba's self-developed reasoning model to analyze user intent deeply, moving beyond keyword matching to provide comprehensive answers to complex queries [4][5]. - The functionality of Deep Search allows for multi-modal interactions and proactive analysis of user needs, enhancing the clarity and logic of the responses provided [4][7]. Group 3: User Experience and Innovation - Quark's approach of "think first, then search" enables it to deliver more in-depth and comprehensive search results, reducing decision-making costs for users [7][10]. - The introduction of features like "photo intelligent processing" and the ability to create artistic images from ordinary photos showcases Quark's commitment to enhancing user experience and expanding AI capabilities [7][10]. Group 4: Market Position and Future Prospects - Quark is positioned to become a national-level "AI super entrance" as it continues to innovate and respond to user demands, evidenced by its recent success in app store rankings [9][10]. - Future developments include the launch of "Deep Search Pro," which promises enhanced analytical capabilities and the ability to provide professional reports, further solidifying Quark's competitive edge in the AI search market [9][10].

Investment Rating - The report maintains a "Recommendation" rating for the media industry, expecting the industry index to rise more than 5% over the next 3-6 months compared to the benchmark index [49]. Core Insights - The media sector is experiencing a resurgence in the film and gaming markets, driven by advancements in AI applications and cultural confidence stemming from popular IPs like "Nezha" [3][6]. - The report highlights the importance of AI applications in reshaping the industry landscape, with a focus on public cloud value reconstruction and the return to growth for related companies [6][9]. - The gaming market shows strong performance, with Tencent and NetEase leading in iOS sales rankings, indicating a healthy competitive environment [16][19]. - The film market is recovering, with total box office revenue reaching 239 billion yuan as of May 9, 2025, which is approximately 102% of the 2019 level [20][23]. Market Performance Review - The media (Shenwan) index rose by 1.40% last week, underperforming the CSI 300 index, which increased by 2.00%, resulting in a relative underperformance of 0.61% [9][10]. - The report notes that the media sector ranks 24th among all sectors in terms of performance [9]. Industry Highlights - The report emphasizes the potential of AI applications in various sectors, including gaming and education, suggesting a focus on companies like Huya, Giant Network, and Perfect World for gaming, and New Oriental and TAL Education for education [6][30]. - The film industry is expected to benefit from a strong pipeline of upcoming releases, with several key films set to debut in mid-May [29][30]. Company Announcements - Perfect World announced a 2025 employee stock ownership plan, indicating a commitment to employee engagement and retention [36]. - Wanda Film disclosed plans for a share reduction by a major shareholder, which may impact market sentiment [38].

Core Insights - The article discusses the rapid evolution of generative AI, particularly focusing on Alibaba's Quark "AI Super Box" and its recent upgrade to "Deep Search," marking a significant advancement in AI applications [2][6][8]. Company Developments - Quark has launched the first "Deep Search" product in China, positioning itself as the first AI application to cater to over 200 million active users [3][4]. - The cumulative download of Quark has surpassed 370 million by 2024, indicating its substantial user base and strategic importance within Alibaba's AI To C (AI to Consumer) business [5][4]. - The new "AI Super Box" integrates various AI capabilities, transforming Quark into a comprehensive "AI Super Assistant" for users [10][20]. Product Features - The "Deep Search" feature allows for intelligent recognition of user intent, utilizing various models and agent modules to provide quick and accurate information [8][9]. - Quark's "High Search Intelligence" (高搜商) enables the AI to understand what to search for, where to search, and how to search, moving beyond traditional search paradigms [8][10]. - The implementation of a "transparent reasoning chain" technology allows users to trace the sources of information, enhancing trust and reliability, especially in sensitive fields like healthcare and law [18][20]. Industry Implications - The launch of Quark's "Deep Search" signifies the onset of the "AI Super Application" era, with Alibaba positioning itself as a leader in this space [6][21]. - The integration of AI into everyday tasks suggests a shift where users will delegate tasks directly to AI, rather than using traditional search tools [20][21]. - Alibaba's commitment to AI-native applications as a core investment direction indicates a strategic focus on enhancing its AI capabilities and ecosystem [21].

Group 1 - The revised Marriage Registration Regulations will take effect on May 10, 2025, eliminating the requirement to present a household registration book for marriage and divorce [3] - The new regulations include three main aspects: expanding marriage and family service content, implementing nationwide marriage registration, and optimizing marriage registration services [3] - The marriage registration authority is prohibited from charging fees for processing marriage and divorce registrations [3] Group 2 - Xiamen Jihong Technology Co., Ltd. has passed the listing hearing on the Hong Kong Stock Exchange, with China International Capital Corporation and China Merchants Jinling International serving as joint sponsors [2] - Panasonic Group announced plans to lay off 10,000 employees globally, with 5,000 from Japan and 5,000 from overseas, during the fiscal year 2025-2026 [6] - Ningde Times is reportedly seeking to raise at least $4 billion through a Hong Kong listing [6] Group 3 - The Italian company Moltiply has filed a lawsuit against Google's parent company Alphabet, seeking €2.97 billion ($3.34 billion) in damages for abusing its market dominance [5] - The U.S. tariff war has significantly increased costs for American companies, with one bicycle manufacturer reporting a nearly threefold increase in wheel costs due to tariffs [6] - The recent divorce of the controlling shareholder of Zhu Cheng Technology involves the transfer of approximately 3.81 million shares, valued at around 3.81 million yuan [6]

Group 1: Technology and Innovation - Feishu quickly adapted to HarmonyOS for computers within a week, showcasing the feasibility of the Harmony development framework and enhancing user experience in the AI era [1] - Tencent's Yuanbao upgraded its text-to-image generation capabilities, allowing users to create images with a single sentence, enhancing image quality and consistency [2] - XTransfer obtained an electronic money institution license from the Dutch central bank, enabling it to provide local accounts and cross-border settlement services to small and medium-sized enterprises in the Netherlands [3] - JD.com launched the "Top Young Technical Talent Program" to attract AI talent globally, offering unlimited salary for graduates and young professionals [4] - Baidu Apollo and Shenzhou Car Rental announced a deep cooperation to explore autonomous vehicle rental services, aiming to provide inclusive smart travel solutions [6][7] - Ningde Times released the world's first 9MWh ultra-large capacity TENER Stack energy storage system solution, marking a breakthrough in large-scale storage technology [5] Group 2: Financial and Market Developments - SK Telecom's CEO indicated potential losses of up to 50 billion USD due to a major data breach, with an estimated 250,000 subscribers leaving the service [5][15] - Infineon Technologies adjusted its fourth-quarter revenue forecast down by 10% due to tariff policy impacts, with second-quarter revenue reported at 3.591 billion euros [14] - The European Union plans to impose tariffs on nearly 100 billion euros worth of US goods if trade negotiations fail, in response to US tariffs on steel, aluminum, and automobiles [15] Group 3: Investment and Financing - Shanghai Natu Intelligent Technology completed a 10 million yuan angel round financing to develop an "intelligent perception cloud platform" [8] - Anhui Guobiao Intelligent Technology secured 30 million yuan in Series A financing to commercialize quantum communication technology and develop a biological computing platform [9] - Zhitu Technology, a leader in commercial vehicle autonomous driving, completed over 100 million yuan in Series B financing to enhance its smart product manufacturing center [10]

Core Viewpoint - The article discusses the evolution of AI search capabilities, particularly focusing on Quark's "Deep Search" which enhances AI's ability to think and provide structured, actionable solutions rather than just summarizing information [2][41]. Group 1: AI Search Evolution - Traditional AI search was limited to finding and summarizing information, often resulting in fragmented and shallow responses [1][2]. - Quark's "Deep Search" represents a significant advancement by enabling AI to actively understand, analyze, and decompose problems before conducting searches, leading to clearer and more reliable answers [2][4]. Group 2: Advantages of Quark's Deep Search - Quark's search logic mimics human reasoning, involving a structured approach of thinking, searching, and integrating information, which enhances both efficiency and answer quality [4][10]. - The system demonstrates superior source traceability, particularly in fields requiring high accuracy, such as health and academia, by utilizing a vast medical knowledge base and collaborating with numerous medical institutions [16][18]. Group 3: Practical Applications - Quark's Deep Search can assist users in various scenarios, from planning travel itineraries based on crowd levels to providing legal advice and health consultations, showcasing its versatility and high "search intelligence" [23][30]. - The platform has built a comprehensive academic literature database and a vast question bank, making it a valuable resource for students and professionals alike [19][20]. Group 4: Future Developments - Quark plans to introduce a "Deep Search Pro" mode designed for more complex inquiries, offering structured and professional-level reports, thus catering to users with advanced needs [32][34]. - The integration of image processing capabilities allows users to extract and manipulate information from images, further enhancing the platform's functionality [36][37]. Group 5: Market Positioning - Quark's advancements position it as a leader in the AI search market, shifting the paradigm from mere information retrieval to problem-solving, thereby democratizing access to AI capabilities for everyday users [41][43].