Broker Name: China Galaxy International Securities (Hong Kong) Co., Limited
Date of Report: March 20, 2026
Excerpt from China Galaxy International Securities report.
Report Summary:
- Alibaba’s Q3FY26 revenue was RMB 284.8 billion, up 2% YoY, but non-GAAP net profit fell 67% YoY due to heavy strategic investments in instant retail, AI, and user experience.
- Instant retail (Quick Commerce) is a key growth driver, with revenue rising 56% YoY and significant increases in annual active users; Alibaba aims for RMB 1 trillion GMV in instant retail by FY28, targeting positive cash flow and profitability by FY29.
- Cloud business showed strong growth (+36% YoY in Q3), with AI-related cloud revenue expected to maintain triple-digit growth and management targeting US\$100bn revenue from cloud/AI by FY31, supported by in-house chip development.
- Due to increased investments in instant retail and marketing, non-GAAP EPS forecasts for FY26-28 were cut by 12.9-18.2%; target price lowered to HK\$180, but “Add” recommendation is maintained, expecting revenue upside from instant delivery and AI/cloud expansion.
- Risks include competition diluting traffic, higher subsidies hurting margins, and large capex affecting profitability.
Above is an excerpt from a report by China Galaxy International Securities. Clients of China Galaxy International Securities can be the first to access the full report from the China Galaxy International Securities website: https://chinastock.com.hk
