20251126-招银国际-Strong_cloud_revenue_growth_still_eyeing_on_synergy_generated_from_quick_commerce_7页_1002kb

Alibaba (BABA US) Equity Research Update

Core Recommendations:

• Maintain BUY rating with revised target price of US$206.40 per ADS.

Key Highlights:

• Strong Cloud Revenue Growth: 34.5% YoY in Q2 FY26, driven by AI-related products (now ~20% of external revenue), accelerating faster than consensus expectations. Management highlighted robust demand supporting sustained growth in coming quarters.
• Quick Commerce (QC) Progress: Per-order UE loss reduced by 50% since Nov 2025; daily orders with Tmall Supermarkets/QC channels saw 30% growth YoM. Synergies expected with core e-commerce via CMR uplift and cross-selling to grocery/healthcare.
• Capital Expenditure: Committed to 3Y plan of RMB380bn, with ~RMB120bn spent over last 4Q on AI/cloud infrastructure amid supply constraints.
• Financials: Revenue growth slowed to 4.0% YoY in FY26E per SOTP, EBITA was 36% below consensus due to QC investments. Adjusted EBITA margin flat YoY at 9.0% for CIG.
• Target Price:
  • Overall target lowered from US$209.40 to US$206.40 (down 1.5%).
  • SOTP components trimmed slightly except for CIG due to revenue forecast increase.

Revenue & EBITA Summary:

• Q2 FY26 Revenue: RMB247.8bn (4.8% YoY), below forecast by 0.7%
• Adj. EBITA: RMB9.1bn (-78% YoY vs consensus)
• 3QFY26 CMR outlook indicates YoY fluctuation from high base.
• FY26E Revenue Forecast: RMB1,036.7bn (1.0% YoY revision from prior estimate)

Business Segment Highlights:

• ACEG (49.1%): 15.5% YoY revenue growth, CMR margin improvement driven by take rate gains. Adj EBITA guidance mixed amid QC investment.
• AIDC (12.9%): 9.9% YoY revenue growth with improved earnings (PBT ~RMB162mn).
• CIG (14.7%): 34% YoY growth powered by AI cloud demand. Expanding market share with over 20% of revenue from external AI products.
• All Others (23.3%): Revenue declined 25% YoY due to business disposals offset by gains in health/logistics; Adj EBITA loss widened due to higher tech investment.

Risks & Outlook:

• Downside: Potential margin pressure from growth investments, timing of consumption recovery.
• Upside: AI/cloud alpha, quick commerce scaling, share repurchases (US$19.1bn remaining authorization).

Key Data Points:

• 3Q25 Target Price: US$206.4 (down 1.5%)
• YE 2025 P/E Projection: 19.3x for FY27E based on SOTP.
• 6M YoY Adj Net Profit Growth: +25.3% (excluding QC impact).