阿里巴巴集团：2025年云栖大会：加大投资拥抱超级人工智能（ASI）时代

2025 Apsara Conf: committing moreinvestments to embrace the ASI era Reiterate Rating: BUY | PO: 195.00 USD | Price: 163.08 USD Long term investments will surpass RMB380b CAPEX plan 24 September 2025 Alibaba Cloud hosted its annual flagship event Apsara Conference this week. In theopening remark, CEO MR. Eddie Wu highlighted that the company will increase investmentin AI and cloud computing beyond the initial budget of RMB380b over the next three yearsto embrace the era of Artificial Superintelligence (ASI). Mgmt. believes large models willbe the next generation of operating systems while AI cloud will be the next generationof computers. Over time, there may be only 5-6 super cloud computing platforms acrossthe globe, in mgmt.’s view. Eyeing the huge opportunity in the new ASI era, the companypositions itself as a world’s leading full-stack AI services provider to offer best-classlarge models, global AI cloud network, as well as open and developer friendly ecosystem. Equity Upgrades in AI models, development, and infrastructures Joyce Ju>>Research AnalystMerrill Lynch (Hong Kong)+852 3508 3371joyce.ju@bofa.com During the event, Baba released major upgrades across its AI models, infrastructure anddevelopment ecosystem. They also releasesd their largest and most capable LLM to dateQwen3-Max, whose instruct version surpasses GPT-5-Chat and the latest visionlanguage model Qwen3-VL, upgraded Qwen-Coder, upgrades of multimodal visual modelseries Wan family and audio model series Fun family. Leveraging its 300+ open-sourceAI models, Baba introduced cloud model studio agent - Bailian to provide end-to-endsupport for development and optimization of AI agents. On the AI infra side, Babaunveiled high-density Panjiu Supernode Server, high-performance network architectureHPN8.0, distributed storage for AI era CPFS and enhanced infrastructure capabilities incl.Lingjun AI cluster, PAI model training, inference, reinforcement leaning acceleration etc. Secular AI upside, solid eC momentum; raise PO to $195 Regarding commercialization, Baba sees sizable cloud upside, driven by robust AI nativedemand, international expansion and traditional industries’rising AI adoption. Leveragingits full-stack Cloud + AI services, we expect fast ramp up from EV, finance and embodiedintelligence verticals. Raise FY26-28e EPADS by 0-4% and consequently PO to US$195(HK$190). Reiterate Buy on estimates 30%+ cloud CAGR next 3 years and solid eC outlook. LLM: large language modelCPFS: Cloud Parallel File StorageAI: Artificial IntelligenceNT: Near-termEV: Electric vehicleeC: e-commerceEPADS: Earnings per ADS >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its research reports. As a result, investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 7 to 10. Analyst Certification on page 4. PriceObjective Basis/Risk on page 4.12878737 Timestamp: 24 September 2025 03:42AM EDT iQprofileSMAlibaba Group Company SectorInternet/e-Commerce Company Description Alibaba Group runs leading online marketplaces (Taobao,TMall, Ele.Me) and B2B sties in China, and Lazada in SEA. Itcollects revenues mainly from commissions, marketingservices, subscription fees, cloud computing and software,and logistics platform services. It also owns media and storechains, and partners with logistics and payment companiesto offer delivery, warehousing, payment & financingservices for its users and merchants. It has a stake andcooperation agreement with Ant Technology. Investment Rationale We expect Alibaba to remain the leading eCommerce andCloud platforms. Its leadership position enables it to benefitfrom industry growth and economies of scale. Alibaba hasindustry-leading investment in R&D to facilitate cross-selling and targeting. Hence there should be room forcustomer management growth. It also runs industryleading B2B and cloud services, and has initiatives targetinglarge addressable markets such as overseas eCommerce,new retail, O2O and an affiliate, Ant Technology. Stock Data Shares / Common0.13Price to Book Value2.4x Exhibit 1: China AI Cloud market share by providers, 1H25According to Omdia, Alibaba Cloud accounts for 36% of China AI cloud market, ranking first among AI Cloud providers Price objective basis & risk Alibaba Group (BABA / BABAF) We use a multi-year DCF to capture the long-term growth profile of the company'sbusiness portfolio, capex and investment. Our SOTP PO is US$195 (HK$190/HK share):1) US$170 from our DCF valuation of the Alibaba