Excerpt from China Galaxy International Securities report.

Report Summary

• Alibaba’s Q2 FY3/26 revenue rose 5% year-on-year to RMB247.8bn, with strong growth from cloud and quick commerce segments. Non-GAAP net profit fell 71% due to higher investments, but was above expectations.
• Quick commerce (instant delivery) losses are expected to narrow significantly in Q3, driven by improved unit economics, higher ticket sizes, and efficiency gains, with management focusing on margin expansion and market share stability.
• Cloud Intelligence revenue surged 34% year-on-year, and management may increase AI capex investment guidance, reaffirming ongoing robust demand and growth prospects in cloud and AI services.
• The target price was raised to HK\$206, with an “Add” rating, citing further growth potential from quick commerce optimization and cloud/AI expansion. Key risks include increased competition, higher subsidies, and large capex outlays impacting margins.
• Recent price performance has been strong, and consensus remains positive with major shareholders including SoftBank and Jack Ma.

Above is an excerpt from a report by China Galaxy International Securities (Hong Kong) Co., Limited. Clients of China Galaxy International Securities can be the first to access the full report from the China Galaxy International Securities website: https://www.chinastock.com.hk