Guohai Securities: Maintaining Alibaba-W (09988) “Buy” Rating Target Price of HK$184

The Zhitong Finance App learned that Guohai Securities released a research report saying that considering the continued acceleration of cloud revenue/profit growth, orderly loss reduction in immediate retail business, and the gradual stabilization of traditional e-commerce business, and adjusted Alibaba-W (09988) profit forecasts, the company's FY2027-2029 revenue is estimated to be 11,312/12,862/1,488.6 billion yuan, respectively, and net profit attributable to mother is 955/1,558/2363 billion yuan, respectively. P/E was 18.6x/11.4x/8.3x, which gave Alibaba a total target market value of RMB 3113.4 billion for the 2028 fiscal year, corresponding to a target price of RMB 156 /HK$184, maintaining a “buy” rating.

Guohai Securities's main views are as follows:

Financial indicators outlook

The bank expects Alibaba's FY2027Q2 (corresponding to the natural year 2026Q3) to achieve total revenue of 270.3 billion yuan (YoY +9%, QoQ +0.5%), adjusted EBITA increased 231% year over year to 30.1 billion yuan, and adjusted EBITA margin was 11%, mainly due to FY2027Q2 traditional e-commerce (domestic+overseas) profits increasing slightly year over year, China's instant retail loss continues to decrease, and AI cloud and computing power service profit margins continue to rise; Alibaba E-commerce Group (China E-Commerce+China Instant Retail+International E-Commerce + Global (Wholesale) Expected revenue of 195 billion yuan. Alibaba E-commerce Group's adjusted EBITA margin is expected to be 20%; AI Cloud and Computing Power Services are expected to generate 60.6 billion yuan (YoY +52%, QoQ +25%). The adjusted EBITA margin for AI Cloud and Computing Power Services is estimated to be 12%.

Traditional e-commerce operations are steady, and instant retail continues to reduce losses

The bank expects FY2027Q2 Alibaba E-Commerce Group to achieve total revenue of 190 billion yuan, of which the rapid growth in China's instant retail revenue is partially offset by a year-on-year decline in customer management (CMR) revenue in China's e-commerce business. It is estimated that reporting CMR revenue will drop 4.5% year on year, mainly due to the impact of accounting processing adjustments on incentives for leading merchant platforms (marketing investment partially offsets revenue) and weak e-commerce market growth (total retail sales of social consumer goods grew by only 1.1% year on year from January to August 2026). The bank expects FY2027Q2 Alibaba E-Commerce Group to achieve an adjusted EBITA of 39.5 billion yuan, with an adjusted EBITA margin of 20%, mainly due to a slight year-on-year increase in traditional e-commerce (domestic+overseas) profits, compounded by continued loss reduction in China's instant retail business (the bank expects FY2027Q2 to lose 9 billion yuan, a significant month-on-month loss reduction). The long-term recommendation is to continue to pay attention to the recovery trend in e-commerce market demand and the UE improvement pace of instant retail (the bank expects adjusted EBITA for FY2027/2028 to be -33.9 billion yuan/-14 billion yuan, respectively).

Cloud business revenue continues to accelerate, and we remain optimistic about improving medium- to long-term profit margins

The bank expects FY2027Q2 AI cloud and computing power service revenue to increase 52% year over year to 60.6 billion yuan. The bank is optimistic about Alibaba Cloud's development potential in basic model iteration and MaaS revenue growth (management is confident that it will exceed 30 billion yuan ARR by the end of 2026 and achieve 100 billion US dollars of external cloud revenue by 2030). The bank expects the FY2027Q2 AI cloud and computing power service to be adjusted to have an adjusted EBITA of 7.3 billion yuan and an adjusted EBITA margin of 12%, which is expected to be accompanied by the release of strong demand for AI clouds, the continued layout of overseas clouds, and the continuous replacement of self-developed chips in the long term (according to disclosure at the 2026 Hangzhou Yunqi Conference, Alibaba will release a next-generation AI chip Zhenwu V900, which has 3 times the performance of the M890. The single cluster built based on it can be expanded to 500,000 cards to support the training and reasoning of cutting-edge models; and the annual shipment volume of Pingtou Ge AI chips is expected Will do a big deal increase) and increase profit margins.

Risk Alerts

Policy regulations increase risk; consumer recovery falls short of expectations; risk of increased competition in the e-commerce and retail industry; increased risk of competition in the cloud computing industry; risk of organizational adjustment falling short of expectations; risk associated with exchange rate fluctuations; risk of geopolitical and international trade friction; risk of data security and privacy compliance; risk of loss of core talent; large-scale financing risks caused by tight cash flow; forward-looking performance forecasts are for reference only.