External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.</li><li>Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.</li><li>We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. </li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Consumption sentiment and offline activities’ recovery pace continued to weigh on internet sector’s 3Q financials performance.Looking into 4Q and 2023, business model robustness, operating leverage improvement, and ability to expand into new revenue streams will be the key stock alpha drivers, while the heavily under-owned China Internet sector will remain sensitive to policies and other sentiment related beta drivers.We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet Sector – 3Q22 preview: near term bumpy recovery

<div><ul><li>Competition on user time spend intensified in 3Q22. Per MoonFox data, in 3Q22, average number of apps installed per capita was 74 in 3Q22, up from 71 in 2Q22 and 66 in 3Q21, while average user time spend per capita per day on apps was 5.4 hours, flat QoQ and declined 0.1 hour YoY, indicating an intensifying competition on user time spend.</li><li>Leading internet giants are enlarging their shares in user time spend: combined user time spend on apps related to Tencent, ByteDance, Alibaba and Baidu accounted for 69.3% of total user time spend in Sep 2022 (Sep 2021: 68.5%; Jun 2022: 68.4%).</li><li>Tencent related apps grew its share in user time spend to 28.3% in Sep 2022 (Sep 2021: 26.7%; June 2022: 27.5%), which in our view could be attributed to the robust ramp-up of Video Accounts, indicating additional monetization opportunities ahead.</li></ul></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Competition on user time spend intensified in 3Q22. Per MoonFox data, in 3Q22, average number of apps installed per capita was 74 in 3Q22, up from 71 in 2Q22 and 66 in 3Q21, while average user time spend per capita per day on apps was 5.4 hours, flat QoQ and declined 0.1 hour YoY, indicating an intensifying competition on user time spend.Leading internet giants are enlarging their shares in user time spend: combined user time spend on apps related to Tencent, ByteDance, Alibaba and Baidu accounted for 69.3% of total user time spend in Sep 2022 (Sep 2021: 68.5%; Jun 2022: 68.4%).Tencent related apps grew its share in user time spend to 28.3% in Sep 2022 (Sep 2021: 26.7%; June 2022: 27.5%), which in our view could be attributed to the robust ramp-up of Video Accounts, indicating additional monetization opportunities ahead.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet Sector – 3Q22 industry data trend recap

Equity Bottom-Up

<ul><li>For 2QFY26E (March year-end), we expect Alibaba Group Holding (Alibaba) to deliver revenue growth of 2% YoY, broadly inline with Bloomberg consensus, with customer management revenue (CMR) and Cloud Intelligence Group (CIG) revenue growth standing at 10% and 30%, respectively.</li><li>Although we have baked in the RMB37.4bn impact on adjusted EBITA from investment in quick commerce (QC) business, we believe the investment should have peaked out in 2QFY26 and its impact on earnings will start to fade in 3QFY26E as QC is on track to halve unit economics loss by end-Oct 2025.</li><li>We fine-tune our target price to US$209.4 (was US$210.3) to reflect adjustments in earnings forecast. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

For 2QFY26E (March year-end), we expect Alibaba Group Holding (Alibaba) to deliver revenue growth of 2% YoY, broadly inline with Bloomberg consensus, with customer management revenue (CMR) and Cloud Intelligence Group (CIG) revenue growth standing at 10% and 30%, respectively.Although we have baked in the RMB37.4bn impact on adjusted EBITA from investment in quick commerce (QC) business, we believe the investment should have peaked out in 2QFY26 and its impact on earnings will start to fade in 3QFY26E as QC is on track to halve unit economics loss by end-Oct 2025.We fine-tune our target price to US$209.4 (was US$210.3) to reflect adjustments in earnings forecast. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alibaba (BABA US) - Quick Commerce Investment Peaked Out; Accelerating AI Adoption

<ul><li>We reiterate our positive view on Alibaba, backed by: 1) strong cloud revenue growth outlook, aided by both increase in adoption of AI-related products and digitalization demand;</li><li>2) solid e-commerce business development outlook, driven by increase in penetration of Quanzhantui, and cross-sell effect brought by the rapid development of Quick Commerce (QC) business, which we believe could help improve user stickiness and drive better customer management revenue (CMR) outlook over the medium to long term.</li><li>With strong technological capability and abundant application scenario of AI, Alibaba is on track to drive its long-term revenue and earnings growth through the two strategic business pillars of “Consumption” and ”AI + Cloud”. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We reiterate our positive view on Alibaba, backed by: 1) strong cloud revenue growth outlook, aided by both increase in adoption of AI-related products and digitalization demand;2) solid e-commerce business development outlook, driven by increase in penetration of Quanzhantui, and cross-sell effect brought by the rapid development of Quick Commerce (QC) business, which we believe could help improve user stickiness and drive better customer management revenue (CMR) outlook over the medium to long term.With strong technological capability and abundant application scenario of AI, Alibaba is on track to drive its long-term revenue and earnings growth through the two strategic business pillars of “Consumption” and ”AI + Cloud”. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alibaba (BABA US) - Cloud and E-Commerce Development Both in Good Shape; Reiterate BUY

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

Mirae Asset Securities Co.,Ltd. provides comprehensive wealth management services. The Company offers fixed income securities brokerage, securities dealing, equity underwriting, and other services. Mirae Asset Securities also deals with mergers and acquisitions, foreign currency, and financial derivatives

<ul><li>Positive medium/long-term outlook intact; retain Buy rating and TP of HK$142 We maintain our Buy rating and target price of HK$142 on Alibaba</li><li>While costs tied to quick commerce will likely pressure near-term earnings, synergies with existing e-commerce operations are already visible, and related earnings should improve over time as scale effects materialize</li><li>Meanwhile, Alibaba has released and open-sourced frontier-level foundation models, and it is reportedly developing its own AI inference chip</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Positive medium/long-term outlook intact; retain Buy rating and TP of HK$142 We maintain our Buy rating and target price of HK$142 on AlibabaWhile costs tied to quick commerce will likely pressure near-term earnings, synergies with existing e-commerce operations are already visible, and related earnings should improve over time as scale effects materializeMeanwhile, Alibaba has released and open-sourced frontier-level foundation models, and it is reportedly developing its own AI inference chipContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alibaba (09988 HK/Buy) Undervalued Relative to Technological Capabilities

China

Alibaba Group Holding Limited is a Chinese multinational technology company specializing in e-commerce, retail, internet, and technology, offering C2C, B2C, and B2B sales services through various marketplaces. It also provides digital media and entertainment, logistics, and cloud computing services. The company was founded in Hangzhou, China, in 1999.

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Alibaba (9988 HK)

China Internet Sector – 3Q22 preview: near term bumpy recovery

We expect leading technology companies will play vital role in building digital infrastructure and empowering enterprise digital transformation.

CMB International

China Internet Sector – 3Q22 industry data trend recap

Combined user time spend on apps related to Tencent, ByteDance, Alibaba and Baidu accounted for 69.3% of total user time spend in Sep 2022 (Sep...

CMB International

Alibaba (BABA US) - Quick Commerce Investment Peaked Out; Accelerating AI Adoption

For 2QFY26E (March year-end), we expect Alibaba Group Holding (Alibaba) to deliver revenue growth of 2% YoY, broadly inline with Bloomberg consensus

CMB International

Alibaba (BABA US) - Cloud and E-Commerce Development Both in Good Shape; Reiterate BUY

We reiterate our positive view on Alibaba, backed by: 1) strong cloud revenue growth outlook, aided by both increase in adoption of AI-related...

CMB International

Alibaba (09988 HK/Buy) Undervalued Relative to Technological Capabilities

Positive medium/long-term outlook intact; retain Buy rating and TP of HK$142 We maintain our Buy rating and target price of HK$142 on Alibaba

Mirae Asset Securities

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