消费业务有望复苏，云服务领域的长期目标坚定

Recovery of consumptionbusinessin sightwith determined long-term goal for cloud Target PriceUS$203.70(Previous TPUS$206.40)Up/Downside63.1%Current PriceUS$124.90 Alibaba’s3QFY26 (March year-end) revenue was RMB284.8bn, up 1.7% YoY,and2%below Bloomberg consensus.Adj.EBITA for the quarter wasRMB23.4bn, down 57% YoY and below consensus of RMB31.4bn, mainly dueto continued investments in quick commerce (QC), user experience,andtechnology.However, cloud business development remains a bright spot, withYoYrevenue growth accelerating to 36%,2ppts ahead of consensus.Managementnoted a recovery in customer management revenue (CMR), withYoY growth improving to more thanthe mid-single-digit range in 1Q26 QTD.Managementalsohighlighted further sequential acceleration in cloud revenuegrowth and reiterated its development targets for the QC business, including aRMB1tn GMV target by FY28 andachievingprofitability by FY29.Alibaba alsoemphasized its ambition to achieve US$100bn in external cloud revenue withinfive years, implying a CAGR of over 40%, supported by strong demand forModel-as-a-Service (MaaS). We remain positive that Alibaba is one of the keybeneficiariesof the AI theme within our coverage universe and suggestinvestors look beyond short-term earnings headwinds. We fine-tune our SOTP-based target price toUS$203.7(previouslyUS$206.4) and maintain a BUYrating. China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO,CFA(852) 3850 5226franktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hk YoY cloud revenue growth exceeded expectations.Cloud IntelligenceGroup (CIG) delivered 36% YoY revenue growth in 3QFY26 (vs. 34.5% in2QFY26),driven by strong public cloud performance and increasingadoption of AI-related products. Management noted that, for FY26 up toFebruary 2026, AlibabaCloud’s cumulative external revenue has surpassedRMB100bn.Alibabatargets over US$100bn in combined cloud and AIexternal revenue over the next five years, implying a CAGR of over 40%.Management also highlighted continued sequential acceleration in cloudrevenue growth, supported by strong demand, and we forecast 40% YoYgrowth for CIG in 1Q26. Recovery of consumption business in sight.Within Alibaba China E-commerceGroup(ACEG),CMR grew 1%YoY in 3QFY26,missingconsensus by 4ppts due to macro softness and a warm winter. However,management indicated growth acceleration in 4QFY26, supported by arecovery in consumption sentiment, and we forecast 6% CMR growth in4QFY26.QC revenue reached RMB20.8bn in 3QFY26, up 56% YoY.Regardingsynergies between QC and conventional e-commerce,management noted that the addition of100mn annual active consumers forphysicalgoods in 2025 of conventional business brought up by QCexceeded the combined total of the previous three years. Alibaba aims tofurther increase user purchase frequency and ARPUof these customersgoing forward.We estimate that operating losses from the QC businessreached RMB20bn in 3QFY26 and expect further improvement in uniteconomics(UE)and loss reduction in 4QFY26, supported by optimizationof user subsidies. Management maintained its targets of exceeding RMB1tnGMV in QC by FY28 and achieving profitability by FY29. Source: FactSet Key business segment updates ACEG(51.5% of3QFY26revenue) In 3QFY26, revenue generatedfrom ACEG was RMB159.3bn, up 5.8% YoY. Within thesegment, E-commerce/QC/China Commerce saw revenue growth of 0.8%/56.0%/5.3%YoY respectively. WithintheE-commerce sub-segment, CMR/direct sales, logistics &others delivered revenue growth of 0.8%/0.3%, respectively. On CMR,management indicated growth acceleration in 4QFY26, supported by a recoveryin consumption sentiment, and we forecast 6% CMR growth in 4QFY26. On QC, management reiterated its commitment to sustained investment over the next twoyears,while highlighting simultaneous progress in market share gains and UE.We expectUEto improve further over the coming quarters, driven by better logistics efficiency,stronger monetization, and order mix optimization. Management maintained its FY28 GMVtarget of over RMB1tn, with positive cash flow expected at scale and overall segmentprofitability targeted in FY29. Adjusted EBITA for the segment was RMB34.6bn in 3QFY26, down 43% YoY, primarilydue to the investment in quick commerce, user experiences, and technology. AIDC (12.7% of3QFY26revenue) In 3QFY26, revenue generated from Alibaba International Digital Commerce Group (AIDC)was RMB39.2bn, up 3.8% YoY, among which international commerce retail revenue wasup 2.5% YoY, driven by the increase inrevenue contributed by AliExpress and otherinternational businesses, and international commerce wholesale revenue was up 10.4%YoY, due to an increase in revenue generated by cross-border related value-addedservices. Adjusted EBITA for AIDC was a loss ofRMB2.0bn in 3QFY26, improving from RMB5.0bnin loss in 3QFY25, thanks to significant improvement in AliExpress’ operating efficiency,and enhan