对即时电商的投资升级可能会影响ST的盈利能力

Escalatedinvestmentininstantcommercecouldweigh on STprofitability Target PriceUS$141.20(Previous TPUS$155.50)Up/Downside36.0%Current PriceUS$103.83 Alibaba Group (Alibaba) is escalating its investment ininstantcommerce toshape abetter prospect in long-term e-commerce business development.For1QFY26(March year-end), we are anticipating a continued acceleration in cloudrevenue growth QoQ, a sustained YoY increase in monetization rate ofTaobao& Tmall Group (TTG), and ongoing YoY loss reduction ofAlibaba InternationalDigital Commerce(AIDC). However, we expect theheightened investment ininstantcommerce to weigh on near-term profitability.We bake inc.RMB10bn/20bnof investment in 1Q/2QFY26E,which will likely lead to16%/45% YoY declinesingroup-level adj. EBITA, and ROI-related operatingdata such as userretention and stickiness, and cross-sell rate are key tomonitor, in our view. We lower our FY26-28E non-GAAP net income forecast by9-18% to factor in the impact from investment.Taking into accountthe cut inTTG earnings, our SOTP-based TP is lowered by 9% to US$141.2 (wasUS$155.5), translating into 14x FY27E PE(non-GAAP).However, we believeAlibaba remains one of the key beneficiaries under the AI theme, and wesuggest investors look beyond near-term earningsfluctuations. Maintain BUY. Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFAfranktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Joanna Ma(852) 3761 8838joannama@cmbi.com.hk 1QFY26 preview.We estimate Alibaba achieved 1QFY26 revenue ofRMB245.7bn, up1% YoY, 4% lower than Bloomberg consensus, due to thedeconsolidation of Sun Art and Intime, which we estimateused tocontributec.ahigh-single digitpercentageof total revenue.Giventhe heightenedinvestment to supportinstantcommerce business development, which weestimateto be c. RMB10bn for the quarter, we are anticipatinggroup-leveladjusted EBITAto come in atRMB37.9bn, down 16% YoY.Currently weexpect Alibaba to further step up investment in 2QFY26, with the totalinvestment amountin instant commercetobedoubled QoQ inthesummerpeak season. Although we believe this could generate synergieswith corecommercebusiness in terms of user stickiness and user shoppingfrequency, the committed investment may weigh on near-term profitability,and ROI-relatedoperatingdataare the key to monitor. Stock Data Increasein monetization rateof T&T Group to continue.Weare lookingforcustomer management revenue (CMR) growth of 11% YoY in1QFY26on the back of6% YoYGMV growth and increase in monetization rate drivenby both incremental technology service fee chargesand the increase inpenetrationof Quanzhantui.However, we expect the investment to drivebusiness expansion ofinstantcommerce should drag on profitability of TTGand Local Services Group (LSG) in the near term. On a combined basis, weare anticipating adjusted EBITA of TTG and LSG to decline 20% YoY toRMB38.6bnin 1QFY26. Sequential acceleration in YoY cloud revenue growthcouldsustain.For1QFY26, weare expecting: 1)22% YoY revenue growth for CloudIntelligence Group (4QFY25:18%), driven byincreasedadoption inbothnewverticals and AI-related cloud services, as well assolid growth of publiccloud business;and we are looking for adjusted EBITA margin of 8.2%(4QFY25:8.0%);2)19% YoY revenuegrowthfor AIDC, with 3ppts QoQdeceleration due totariffimpact and more moderate investment plans duetoefficiency considerations.Meanwhile,we are expecting a meaningful adj.EBITA loss reduction to RMB1.8bn (1QFY25:loss ofRMB3.7bn), and webelieve AIDCis on track to achievethefirst quarter of profitability in FY26. Source: FactSet Revision of forecast and valuation Wenudge down our FY26-28E revenue forecast by 1.7-2.0%,mainly driven by thedeconsolidation of Sun Art and Intime,and we cut non-GAAP net profitforecastby 9-18%to factor in additional investment in quick commerce. Valuation: target price of US$141.2per ADS Ourtarget price of US$141.2comprises, per ADS: 1)US$65.4(was US$79.1) for Taobao and Tmall Group, based onan unchanged 8.0xFY26EEV/adj.EBITA.The loweringof valuationis mainly due to lower earningsforecast after accounting for incrementalimpactfrominvestmentto support instantcommerce business growth;2)US$13.9for AIDC (was US$14.0), based on an unchanged 1.5x EV/revenue multiple;3)US$4.5for Local Services Group (unchanged), based onanunchanged1.0x FY26EEV/revenue multiple;4)US$2.8for Cainiao (unchanged),based on the latest valuation given by Alibaba torepurchase Cainiao shares from minority shareholders, and Alibaba’s current 63.7%shareholding on a fullydiluted basis;5)US$34.3for the Cloud Intelligence Group (was US$33.8),based on an unchanged 4.0xEV/revenue multiple on FY26E revenue;6)US$1.0 for Digital Media and Entertainment Group(unchanged)based on anunchanged0.7x EV/revenue multiple;7)US$8.2for All Others (was US$9.5), based on an unchanged 1.0x EV/revenue multiple;the loweringin valuation mainly reflects deconsolidation of Sun Artand Intimegiventhe sale of the businesses;8)US$11.1