Core Viewpoint - Alibaba's stock price has experienced a significant decline, with an 8.45% drop on October 10, marking a total decrease of 16.02% over six consecutive trading days, raising market concerns [1][2] Group 1: Stock Performance - On October 10, southbound funds sold Alibaba shares worth 18.1 billion HKD, contributing to downward pressure on the stock price [1] - The Hang Seng Tech Index fell over 3% on the same day, indicating a broader tech sector pullback that affected Alibaba's stock [1] Group 2: Analyst Predictions - Morgan Stanley predicts a 70% year-on-year decline in adjusted earnings for Alibaba by the end of Q3 2025 due to investments in AI and instant retail, heightening market anxiety [1] - Despite short-term profit adjustments, Bank of America maintains a bullish outlook, reiterating a buy rating with a target price of $200, citing long-term growth potential from cloud services and e-commerce monetization [1][2] Group 3: Long-term Growth Potential - Bank of America forecasts Alibaba's cloud business to maintain a high growth rate, with revenue growth expected to accelerate to 30% year-on-year [1] - The report indicates that Alibaba's customer management revenue in e-commerce is projected to grow steadily by 10%, particularly benefiting from instant retail on Taobao [1] - By FY2028, Alibaba's net profit growth is expected to recover to 39%, supported by a valuation model that includes DCF valuation of core businesses and the value of Ant Group's equity [2]

Core Viewpoint - Huachuang Securities maintains a "Buy" rating for Alibaba-W (09988) with a target price of HKD 173.86, driven by rapid growth in instant retail revenue and synergistic effects [1] Financial Performance - For FY26 Q1, Alibaba reported revenue of CNY 247.65 billion, a year-over-year increase of 2%, and a 10% increase when excluding disposed businesses [1] - Adjusted EBITA for FY26 Q1 was CNY 38.84 billion, down 14% year-over-year, with an EBITA margin of 16% [1] - Capital expenditures for FY26 Q1 were CNY 38.7 billion, up from CNY 24.6 billion in the previous quarter [1] Business Segment Analysis - **China E-commerce**: Revenue increased by 9.7% year-over-year, with customer management revenue (CMR) up 10.1% due to new software service fees and improved penetration of "full-site promotion" [1] - **International Business**: Revenue grew by 19% year-over-year, with adjusted EBITA showing a loss of CNY 0.59 billion, significantly reducing losses [3] - **Cloud Business**: Revenue rose by 26% year-over-year, with adjusted EBITA also up 26%, and an EBITA margin of 8.8%, driven by growth in public cloud services and increased adoption of AI-related products [1][2] Instant Retail Insights - Instant retail showed a year-over-year growth of 12%, with management highlighting operational metrics such as a peak daily order volume of 12 million and 300 million monthly active buyers [2] - Management aims to reduce unit economics (UE) for instant retail by half while projecting an additional CNY 1 trillion in GMV over the next three years [2] Cloud Business Outlook - The cloud business is expected to continue its upward trajectory, with a 26% growth rate in FY26 Q1 and AI revenue accounting for over 20% of external commercial income [2] - Management reiterated a commitment to invest CNY 380 billion over three years to bolster cloud growth [2]

Core Viewpoint - Huachuang Securities maintains a "Buy" rating for Alibaba-W (09988) with a target price of HKD 173.86, driven by rapid growth in instant retail revenue and synergistic effects [1] Financial Performance - For FY26 Q1, Alibaba reported revenue of CNY 247.65 billion, a year-over-year increase of 2%, and a 10% increase when excluding disposed businesses [1] - Adjusted EBITA for FY26 Q1 was CNY 38.84 billion, down 14% year-over-year, with an EBITA margin of 16% [1] - Capital expenditures for FY26 Q1 were CNY 38.7 billion, up from CNY 24.6 billion in the previous quarter [1] Business Segment Analysis - **China E-commerce**: Revenue increased by 9.7% year-over-year, with customer management revenue (CMR) up 10.1% due to new software service fees and improved penetration of "full-site promotion" [1] - **International Business**: Revenue grew by 19% year-over-year, with adjusted EBITA showing a significant reduction in losses [1] - **Cloud Business**: Revenue rose by 26% year-over-year, with adjusted EBITA also increasing by 26%, and an EBITA margin of 8.8%, driven by growth in public cloud services and AI-related product adoption [1][2] Instant Retail Insights - Instant retail achieved a peak daily order volume of 12 million, with monthly active buyers reaching 300 million, a 200% increase since April [3] - The number of active riders reached 2 million daily, a 300% increase compared to April [3] - Management aims to reduce unit economics in instant retail by half while maintaining current consumer incentives [3] International Digital Business - AIDC revenue grew by 19% year-over-year, with adjusted EBITA showing a significant reduction in losses to CNY 0.59 billion [4] - The unit economics of AliExpress Choice continue to improve through collaboration with local merchants and AI tools to enhance marketing and procurement efficiency [4]

Core Insights - The company reported FY26Q1 revenue of 247.7 billion yuan, with adjusted EBITA of 38.8 billion yuan and adjusted net profit of 35.3 billion yuan, exceeding Bloomberg consensus expectations [1] - The capital expenditure for FY26Q1 was 38.6 billion yuan, also surpassing Bloomberg consensus [1] E-commerce Segment - The Chinese e-commerce group's revenue reached 140.1 billion yuan, exceeding Bloomberg consensus by 15%, with e-commerce revenue of 118.6 billion yuan [2] - Customer management revenue grew by 10% year-on-year, driven by an increase in take rate, which benefited from new software service fees and improved penetration rates [2] - The launch of "Taobao Instant Retail" in April has led to significant user engagement, with peak daily orders reaching 120 million and a weekly average of 80 million [2] - The number of 88VIP members grew by double digits year-on-year, surpassing 53 million [2] Cloud Intelligence Segment - The Cloud Intelligence Group reported revenue of 33.4 billion yuan, with adjusted EBITA of 3 billion yuan, a year-on-year increase of 6 billion yuan [3] - Revenue growth of 26% was primarily driven by public cloud services, particularly in artificial intelligence-related products, which have seen triple-digit year-on-year growth for eight consecutive quarters [3] - The company is developing a new AI chip aimed at broader AI inference tasks, currently in testing [3] AIDC Segment - AIDC reported revenue of 34.7 billion yuan, with adjusted EBITA of -0.06 billion yuan, showing a year-on-year revenue growth of 19% [3] - The strong performance in cross-border business has led to significant improvements in operational efficiency, with losses narrowing both year-on-year and quarter-on-quarter [3] Shareholder Returns - The company repurchased 56 million shares for a total of 815 million USD in the quarter, with an authorized remaining buyback amount of 19.3 billion USD as of June 30, 2025 [4] Investment Outlook - The company expects revenue for FY 2026-2028 to be 1,030.6 billion, 1,148.6 billion, and 1,279.3 billion yuan respectively, with adjusted net profit estimates of 129.3 billion, 152.1 billion, and 178.2 billion yuan [4]

Investment Rating - The investment rating for Alibaba-W (09988) is "Buy" with a target price set above the current price of HKD 129.8, indicating an expected relative return of over 20% within the next six months [5][13]. Core Insights - The report highlights that Alibaba's cloud business continues to maintain high growth, with revenue exceeding Bloomberg consensus expectations. The company is also investing significantly in artificial intelligence-related products, which have shown consistent triple-digit year-over-year growth for eight consecutive quarters [4][3]. - The Chinese e-commerce group's revenue for FY26Q1 reached CNY 1,401 billion, surpassing Bloomberg consensus by 15%. The report notes that the introduction of "Taobao Instant Retail" has led to significant user engagement and order volume growth [2][4]. - The AIDC segment reported a revenue increase of 19% year-over-year, driven by strong cross-border business performance and improved operational efficiency [3][4]. Summary by Sections Financial Performance - For FY26Q1, Alibaba reported total revenue of CNY 2,477 billion, with adjusted EBITA of CNY 388 billion and adjusted net profit of CNY 353 billion. Capital expenditures for the quarter were CNY 386 billion, exceeding Bloomberg consensus expectations [1][4]. Chinese E-commerce Group - The Chinese e-commerce group's revenue was CNY 1,401 billion, with an adjusted EBITA of CNY 384 billion, reflecting a year-over-year decline of CNY 104 billion. The "Taobao Instant Retail" service has significantly boosted user engagement, with peak daily order volumes reaching 120 million in August [2][4]. Cloud Intelligence Group - The Cloud Intelligence Group generated revenue of CNY 334 billion, with an adjusted EBITA of CNY 30 billion, marking a year-over-year increase of CNY 6 billion. The growth was primarily driven by public cloud services and increasing adoption of AI-related products [3][4]. Shareholder Returns - The company repurchased 56 million shares for a total of USD 815 million during the quarter. As of June 30, 2025, the remaining authorized amount for the stock repurchase plan is USD 19.3 billion [4].