买入：人工智能商业化的拐点

InternetSoftware&Services • BABA expects MaaS ARR to reach RMB30bn (USD4.4bn) byFY27e +MaintainBuy,liftTPtoUSD180.00 (fromUSD172.00)on estimate changes and roll-forward and cross-selling of public cloud service underpin our view of stronger cloud growth intoFY27. More importantly, we see near-term cloud margin upside led by (1) CPU priceappreciation,(2)a revenue mix shift toward higher-margin MaaS,and (3)growingdeployment of in-house T-head chips lifting inference efficiency. We estimate MaaS nowconstitutes 20%+ of Al revenue vs 10% last quarter and can grow to 35% by end-FY27(Ex. 1). We lift our cloud FY27-28e EBITA by 40-50% on higher margin. This can lift themarket's cloud valuation assumption, in our view (SOTP,pg.5).Continual narrowing offood delivery losses with monthly unit economics potentially turning positive before end-costs reflected in all others is expectedto have peaked in 4QFY26 too. LowerhenceweonlyraiseFY27-28eearnings2%.Afterreflectingestimatechangesandmoving DCFvaluation one year forward, we revise up TP to USD180 (from USD172)onour preferred Al name. We maintain a Buy. Cloud growth drivers breakdown: (1) Explosive growth in MaaS revenue: BABAexpectMaaS annual recurring revenue(ARR)to surgefromRMB10bn in June toRMB30bnbyFY27eascustomersmovebeyondchatbotsandsimpletaskstocomprehensiveagenticAlappssuchasproduction-scaledeploymentsandplatformlevel workloads. The majority of MaaS revenue is from API sales (primarily Qwen) viaBailian, with the remainder from Al-native software subscriptions. (2) Emerging Al-related revenue (with contribution from MaaS): Al-related products were 30% ofexternal cloud revenue in4QFY26 andgrewtripledigitsy-o-y.BABAexpectsthis togo over 50% within a year. (3) Cross selling to traditional cloud: Al has increaseddemand for traditional cloud products including CPU, storage, and containers. Therollout of agentic Al accelerates this trend as it consumes even more traditional cloudproducts. IDC data shows China's public laaS revenue growth strengthened in 2H25to 20% y-0-y; BABA grew faster on market share gains (Ex. 3). Charlene Liu*Head of Internet and Gaming Research, Asia PacificThe Hongkong and Shanghai Banking CorporationLimited, Singapore Branchcharlene.r.liu@hsbc.com.sg+6566580615 Charlotte Wei*Analyst, Internet Research The Hongkong and Shanghai Banking Corporation Limitedcharlotte.wei@hsbc.com.hk+85229966539 4QFY26 review:Revenue increased 3%y-0-y toRMB243bn (+11%organic), c1%belowHSBCe/consensus.Cloudgrew38%,belowHSBCe/consensusbyc1%mainly ona shortfall in internalrevenue;CMR(+1%)and international (+6%)were inline with HSBCe. Adjusted EBITA fell 84% y-0-y to RMB5.1bn, missing HSBCe by7% on weaker-than-expected China e-commerce EBITA.Non-GAAP net incomedeclined 95%to RMB1.5bn,missing HSBCe/consensus by78%/89%,on lowerprofits from equity investees (details on pg. 9), Lauren Cai*AssociateGuangzhou *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/qualified pursuant to FINRA regulations Issuer of report: The Hongkong and ShanghaiBanking Corporation Limited, Singapore Branch Disclosures&Disclaimer This report must beread with the disclosures and the analyst certifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it. ViewHSBCGlobal InvestmentResearchat:https://www.research.hsbc.com CompetitivelandscapeofconsumerAlapps DissectingCMRdrivers 27% growth Excluding the disposed Sun Art and Intime businesses, revenue on a like-for-like basiswould have grown by 11% y-o-y. and 56%, with an EBITA margin of 2.1%. The c12ppt decline was primarily due investment intechnology businesses, quick commerce, and user experiences, partly offset by improvedoperating results of customermanagement serviceand cloud business, as wellas enhancedoperatingefficienciesacrossvariousbusinesses.Non-GAAP net income attributable to ordinary shareholders declined 95% y-0-y to RMB1.5bn, with near 0% margin (down c13ppt)-78-89% below HSBCe and consensus.Shareholderreturn update:Alibaba'sboard approved a FY26 regularcash dividendof USD2.5bn and c0.8% yield. CMR growth: Alibaba reclassified subsidies under its upgraded merchant businessdevelopment programmefrom S&M expense to a contra-revenue itemagainst CMR,which reduced CMR growth to 1% y-o-y (vs 8% y-o-y on a like-for-like basis).Quick commercecontinuedto scalewhile improving UE,withmore emphasisonhigher-value food orders and non-food categories. Average order value rose q-o-q,mainly due to order mix optimisation.88viP members continued to increase by double digits y-o-y, reaching 62m during thequarter (vs 59m in 3QFY26).Al integration: Taobao/Tmall are now embedded in the Qwen app,Taobao launched aautomate workflows and improve operating efficiency. Cloud Intelligence Group: CloudrevenueandrevenueexcludingAlibaba'sconsolidatedsubsidiaries increased38% and 40% y-0-y, respectively.Al-related product revenue reached RMB9.0bn, or30% of external cloud revenue, and post