Institution: Alibaba's profit margin is expected to gradually improve.

Analysts at Dahua Jixian said in a report that Alibaba's performance in the third quarter of the 2026 fiscal year may be disappointing, but with the slowdown in investment in the competitive instant delivery sector, profit margins are expected to gradually improve. These analysts remain cautiously optimistic about the core e-commerce business, as this business faces high base effects and competition, but they are bullish on the cloud business. Dahua Jixian expects customer management revenue to increase by 3.5% year-on-year, while non-GAAP net profit is projected to decrease by 45%. The brokerage firm predicts that Alibaba's cloud business revenue will soar by 36%. The brokerage firm maintains a buy rating on Alibaba's H-shares and a target price of HK$206, pointing out that Alibaba remains the only listed company in China with full-stack AI capabilities.