Alibaba (BABA)/ 9988 HK; Jack Ma 04 (Dec 23 - Dec 26)

[winston]

4QFY26 Results

Preview: Soft CMR Growth Due To Change In Accounting Treatment; Sanguine AI+Cloud Outlook

Highlights

We expect 4QFY26 results to show soft revenue growth with narrowing losses in quick commerce partially offset by softer core commerce growth amid weaker online retail performance in March.

Cloud growth remains solid and broadly in line with expectations.

However, overall profitability may be weighed down by higher-than-expected losses in the “All Others” segment, driven by continued investments in AI and marketing effort.

Maintain BUY with an unchanged target price of HK$192.00 (US$196.00).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

vested

Stock to Sell: Alibaba

Alibaba represents the stock to consider selling ahead of its March quarter earnings on Thursday.

While the e-commerce and cloud giant maintains significant scale, it faces persistent headwinds including margin pressures from heavy investments in AI and cloud, slower growth in core segments, and broader macroeconomic uncertainties in China.

Analysts have grown increasingly cautious on BABA ahead of the print, with 13 of the last 14 revisions being made to the downside.

The options market is pricing in a potential move of +/-7.3% for shares post-earnings.

Consensus estimates call for the Hangzhou, China-based tech giant to announce earnings per share of ¥7.11 ($1.05) on revenue of ¥247.20 billion ($36.3 billion).

Despite trading at a seemingly attractive valuation, the company faces a multi-front battle: intensifying competition in Chinese e-commerce from rivals like PDD Holdings, a sluggish economic recovery in China, and ongoing regulatory scrutiny from Beijing.

Furthermore, its cloud division, once a promising growth engine, has struggled to retain market share amid heightened domestic competition.

At the same time, delisting chatter continue to hang over U.S.-listed Chinese equities, limiting the multiple that investors are willing to pay even when fundamentals improve.

Now at $140.06, BABA stock is pushing directly into a dense resistance band defined by the Ichimoku cloud ($135.74–$140.06) and the critical 50–61.8% Fibonacci retracement ($138.33–$143.14) of its February–April decline.

Despite a 27% upside implied by analyst targets and a strong “Buy” consensus, the near-term setup looks fraught.

Trade Setup:
Entry: ~$140.00
Exit Target: $129.00 (gain +7.8%)
Stop-Loss: $145.85 (risk -4.2%)

Source: investing.com

https://www.investing.com/analysis/1-st ... s_headline

[winston]

vested

<Research>Citi: BABA-W (09988.HK) Top Pick for CN AI Investment; Alibaba Cloud's Full-Stack AI Capabilities Strong

BABA-W (09988.HK)'s Alibaba Cloud possesses vertically integrated full-stack AI capabilities spanning its chip arm T-Head, IaaS, PaaS, and MaaS, Citi said in its report.

Together with the continued advancement of its Qwen LLM and Model-Scope platform, the broker was optimistic that the company is well positioned in the rapidly expanding token economy and named BABA-W as its top pick for China AI investment.

Citi reiterated its Buy rating on BABA-W, with a TP of HKD204 for Hong Kong stocks and a TP of USD205 for Alibaba Group (BABA.US) .

The broker believed the company's continuously enhancing full-stack AI capabilities will amplify cost synergies and margin expansion.

Citi also raised its cloud revenue forecasts for FY2028-29 and introduced projections for FY2030-31.

It expected total capex for FY2026-31 to reach RMB822.9 billion, equivalent to an annual average of about 32% of cloud revenue.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

Alibaba to exceed planned AI spending and says margin is secondary

Revenue from Alibaba's Cloud Intelligence Group rose 38 percent to 41.63 billion yuan (US$6.13 billion) from a year ago.

Targeting more than US$100 billion in combined external revenue from its AI and cloud divisions over the next five years.

Excluding one-time items, Alibaba's net income for the quarter dropped 99.7 percent and adjusted EBITA decreased 84 percent, which Alibaba attributed to the investment in its technology businesses as well as in quick commerce.

Alibaba reported revenue of 122.22 billion yuan (US$18 billion) in its China e-commerce business, which includes the highly competitive quick commerce segment, exceeding estimates of 119.85 billion yuan. 

Source: The Standard

https://www.thestandard.com.hk/innovati ... le/331959/

[winston]

not vested

Alibaba (9988 HK/BABA US) – Mar quarter 2026 EBITA miss, but cloud inflection strengthens

Mar quarter 2026 adjusted EBITA fell 84% y/y to RMB5.1bn, below expectations on higher-than-expected AI model training losses and Qwen app user acquisition spend during CNY

External cloud accelerated to +40% y/y, in line; mgt guided MaaS ARR to reach RMB30bn by Dec’26 and a notable cloud margin expansion from next quarter onwards

Maintain BUY on Alibaba's full-stack AI leadership, with cloud margin expansion and earlier quick commerce breakeven (FY27 UE+ve) reinforcing the structural case; TP under review

Source: DBS

https://www.dbs.com/insightsdirect/comp ... ecid=30964

[winston]

not vested

Summary of Latest Ratings, TPs, Views on BABA-W (09988.HK)(BABA.US)

Brokers | Ratings | TPs | Core Views

Related News BABA-W (09988.HK) Investment Ratings and TPs (Table)

CMBI | Buy | USD206.1 -> 220.1 | Strong development prospects for cloud business

Citi | Buy | HKD204 -> 207 / USD205 -> 208 | AI-related cloud revenue recorded triple-digit growth for 11 consecutive quarters. MaaS ARR reached RMB8 billion. Although short-term AI technology investment drags on profit, it is a strategy to capture immense opportunities. Core businesses maintain strong cash flow. As the contribution from high-margin MaaS increases, cloud business margins are expected to improve notably.

JP Morgan | Overweight | HKD195 / USD200 | Non-GAAP net profit and FCF in the latest fiscal quarter were weak, likely prompting lower forecast adjustment by market. Operational disclosure showed divergence: external cloud computing revenue growth accelerated to 40%, but adjusted EBITA losses in the "Others" segment doubled.

Nomura | Buy | USD200 | Latest fiscal quarter results were dented by substantial marketing spending on Qianwen AI during the Lunar New Year period, leading to a plunge in adjusted EBITA. Quick commerce was also a major drag. Excluding the impact of accounting policy changes, TTG CMR grew 8%. If China e-commerce profit remains stable going forward, market sentiment may turn more upbeat.

CLSA | Outperform | USD190 | Latest fiscal quarter results met expectations, with total revenue up 2.9%. Cloud computing is entering a phase of rapid growth, and AI has moved into commercialization.

BOCI | Buy | HKD182 / USD187 | Steady and high-quality scaled commercialization is driving sustainable earnings growth in the cloud business.

Related News Citi: BABA-W (09988.HK) Top Pick for China AI Investment; Alibaba Cloud's Full-Stack AI Capabilities Strong

Goldman Sachs | Buy | HKD180 / USD186 | Cloud computing growth is accelerating and MaaS provides upside for margins. AI-related products are expected to increase their share of external cloud revenue from 30% in the latest fiscal quarter to over 50% within one year. A strong net cash balance sheet supports higher capex. Quick commerce is expected to achieve a profit turnaround in FY2027-29.

HSBC Research | Buy | USD172 -> 180 | Accelerating MaaS revenue, GPU leasing and public cloud cross-selling support strong cloud growth. Rising CPU prices, revenue mix shift toward higher-margin MaaS, and deployment of self-developed T-Head chips to enhance inference efficiency will drive notable short-term improvement in cloud margins. Losses in the food delivery business are expected to continue narrowing.

Morgan Stanley | Overweight | USD180 | 4FQ revenue and EBITA were in line

UBS | Buy | HKD166 -> 179 / USD170 -> 184 | 4FQ results met expectations. AI-related revenue accelerated cloud computing growth. High-margin MaaS and deployment of self-developed chips are expected to support margin expansion. Although e-commerce investment and contra-revenue subsidies weighed on TTG CMR in the short term, quick commerce losses will narrow more significantly.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN