CICC: Lowering Alibaba Group Holding Ltd - W (09988) target price to HK$172, maintaining "outperform" rating.

Zhongjin released a research report stating that Alibaba-W (09988) announced its third quarter of the 2026 fiscal year, which is the performance of the fourth quarter of last year, with revenue increasing by 1.7% year-on-year to 284.8 billion yuan. Excluding the impact of asset disposals, the comparable caliber increased by 9% year-on-year, lower than expected, due to poor performance in both Chinese and international e-commerce. Adjusted EBITA decreased by 57.3% year-on-year to 23.4 billion yuan, mainly due to investment in Taobao Flash Sales and drag on e-commerce. Cloud revenue accelerated, and Pinduoduo mass-produced. Both Chinese and overseas e-commerce are under pressure, with reduced losses in Flash Sales UE on a quarterly basis. The target prices for Hong Kong and US stocks were lowered by 13% to 172 Hong Kong dollars and 178 US dollars, while maintaining an "outperform industry" rating. The bank lowered its revenue forecast for the fiscal years 2026 and 2027 by 1% each, to 1.033 trillion yuan and 1.1875 trillion yuan, due to weak performance in e-commerce; and reduced its non-GAAP net profit forecasts for the fiscal years 2026 and 2027 by 15% and 27%, to 80.7 billion yuan and 98.3 billion yuan, due to increased investment in AI and Flash Sales.