Broker: CGS International
Date of Report: July 7, 2025

Oiltek International and Alibaba: Key Investment Trends and Technical Analysis for 2025

Market Overview: Global Trade Tensions and Economic Outlook

Global financial markets remain on edge as investors await clarity on the next steps in US trade policy. President Donald Trump’s deadline for new tariffs is fast approaching, ending a 90-day reprieve and potentially ushering in a new wave of protectionist measures. These tariffs, aimed at reducing the US trade deficit and boosting domestic manufacturing, are expected to start generating government revenue from August 1. The situation has left negotiators rushing to finalize trade pacts ahead of the July 9 deadline.

Key economic indicators in the US remain resilient, with robust hiring and restrained inflation. However, the Federal Reserve is taking a cautious stance, waiting to assess the impact of tariffs on economic output in the coming months. Uncertainty generated by this evolving trade policy is making strategic business planning increasingly complex for supply-chain managers, as they balance production, inventories, hiring, and demand in an unpredictable tariff landscape.

Alibaba Group: Aggressive Push in Instant Delivery

Alibaba Group is making bold moves to dominate the instant delivery sector. The company recently announced a massive RMB 50 billion investment in subsidies for its instant delivery business over the next 12 months. This aggressive strategy is expected to drive rapid growth in daily order volume, which now stands at an impressive 60 million per day.

• Financial Impact: Projected losses for the instant delivery segment are forecasted at RMB 6.9 billion for 1QFY26F and RMB 40 billion for FY26F, reflecting the high cost of market share expansion.
• Core Business Strength: Despite the heavy spending on instant delivery, Alibaba’s Taobao and Tmall platforms are expected to deliver solid growth. The company forecasts an 8% year-on-year increase in Customer Management Revenue (CMR) for 1QFY26F and a 6% increase for FY26F, bolstered by improved take-rates and a new home appliances trade-in policy.
• Valuation Update: The recommendation remains “Add,” with a revised discounted cash flow (DCF)-based target price of HK\$153. However, Alibaba has been removed from the broker’s High Conviction list.

Oiltek International Ltd: Technical Buy with a Strong Bullish Trend

Oiltek International Ltd, a leading provider of renewable energy equipment, is showing strong technical signals for a continued bullish trend. The latest technical analysis suggests significant upside potential, making it a compelling pick for investors seeking exposure to the green energy sector.

Technical Analysis Snapshot

Key Bullish Indicators

• The stock has formed a bullish pennant formation, signaling a strong likelihood of an upward breakout.
• The major uptrend remains firmly intact, supporting continued price appreciation.
• Ichimoku technical signals are bullish, with the stock closing above the kumo cloud, reinforcing positive momentum.
• MACD indicators are robust: both the signal and MACD line are above zero, and the histogram is positive, indicating bullish momentum.
• The 23-period Rate of Change (ROC) is positive and rising, further confirming bullish sentiment.
• Trading volume is expanding healthily, a key confirmation of upward price movement.

Investment Ratings Framework

The broker’s stock ratings are as follows:

• Add: Total return expected to exceed 10% over the next 12 months.
• Hold: Total return expected between 0% and 10% over the next 12 months.
• Reduce: Total return expected to fall below 0% over the next 12 months.

For the quarter ended March 31, 2025, 551 companies were under coverage, with the following distribution:

Key Takeaways for Investors

• Global trade tensions are a critical macro risk to watch, as new US tariffs could disrupt market stability and supply chains.
• Alibaba’s aggressive subsidy program is set to reshape the instant delivery market, but not without significant near-term losses. Core e-commerce remains strong.
• Oiltek International Ltd stands out for its robust technical signals, offering multiple bullish indicators and attractive price targets for investors seeking exposure to renewable energy.

As always, investors are advised to conduct their own due diligence and consult with financial advisors before making investment decisions.