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2026-03-20 10:04:21 Daiwa published a research report on BABA-W (09988.HK), which had delivered 3QFY26 results missing expectations, owing to underwhelming 3Q cloud revenue growth and group profitability. During the earnings call, management reiterated its medium-term targets, including achieving USD100 billion in external AI and cloud business revenue within five years, and projecting the GMV of its quick commerce business to reach RMB1 trillion by FY28, with overall profitability turning positive by FY29. The focus on monetization of AI and cloud businesses is strengthening, in Daiwa's view. As of 11MFY26, external AI and cloud business revenue reached RMB100 billion, with overseas market revenue accounting for a high high-teens percentage. With the average daily token processing volume in March tripling compared to December last year; paired with price hikes in cloud products, external cloud business revenue was expected to accelerate in 2026. Based on the weaker-than-expected 3FQ earnings, Daiwa lowered Alibaba's EPS forecast for FY26-28 by 6-15%, reiterated a Buy rating, and reduced the SOTP-based 12-month TP from HKD191 to HKD184. Daiwa maintained its view on the long-term positioning of the AI-driven cloud business but cautions that further subsidies for user acquisition costs are a major downside risk. ~ AASTOCKS Financial News Website: www.aastocks.com | |