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.

Equity Bottom-Up

<ul><li>Alibaba’s 4QFY26 revenue was RMB243.4bn, up 3% YoY, 1% below Bloomberg consensus but 0.4% ahead of our prior forecast.</li><li>Adjusted EBITA for the quarter was RMB5.1bn, down 84% YoY, mainly due to investments in technology businesses, quick commerce, and user experience, but was 7% ahead of our forecast.</li><li>For FY26, total revenue grew 3% YoY, while adjusted EBITA declined 56% YoY. </li></ul>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’s 4QFY26 revenue was RMB243.4bn, up 3% YoY, 1% below Bloomberg consensus but 0.4% ahead of our prior forecast.Adjusted EBITA for the quarter was RMB5.1bn, down 84% YoY, mainly due to investments in technology businesses, quick commerce, and user experience, but was 7% ahead of our forecast.For FY26, total revenue grew 3% YoY, while adjusted EBITA declined 56% YoY. 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) - Strong Cloud Business Development Prospects

Thematic (Sector/Industry)

<ul><li>The latest 2Q26 results from major overseas cloud service providers (Amazon, Microsoft and Google) highlighted that ROI in AI-related investment showed continued improvement.</li><li>Despite unchanged CapEx guidance, or only modest increases due to higher memory costs and earlier capacity delivery, cloud revenue and OP growth came in materially ahead of expectations and prompted upgrades to group-level earnings outlooks.</li><li>Clear disclosure by mgmt. on cloud investment payback periods and backlog-implied demand, together with a stronger focus on cash flow and investment efficiency, was well received by the market. </li></ul>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.

The latest 2Q26 results from major overseas cloud service providers (Amazon, Microsoft and Google) highlighted that ROI in AI-related investment showed continued improvement.Despite unchanged CapEx guidance, or only modest increases due to higher memory costs and earlier capacity delivery, cloud revenue and OP growth came in materially ahead of expectations and prompted upgrades to group-level earnings outlooks.Clear disclosure by mgmt. on cloud investment payback periods and backlog-implied demand, together with a stronger focus on cash flow and investment efficiency, was well received by the market. 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.

Internet - Implications from Earnings Beats by North American Cloud Majors

Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

<ul><li>In 1H26, the Hang Seng Index (HSI) has shown a moderate correction but highly distorted signal, declining by ~3,450 points from 26,338 to 22,881 between Jan 2 and Jun 30, 2026.</li><li>However, we believe the headline index performance fails to capture the true market dynamics, particularly the ongoing AI-driven structural rally across AI foundation model, semiconductor memory and PCB names.</li><li>As a result, we believe that HSI is no longer a reliable benchmark for capturing “growth beta” in Hong Kong equities.</li></ul>

In 1H26, the Hang Seng Index (HSI) has shown a moderate correction but highly distorted signal, declining by ~3,450 points from 26,338 to 22,881 between Jan 2 and Jun 30, 2026.However, we believe the headline index performance fails to capture the true market dynamics, particularly the ongoing AI-driven structural rally across AI foundation model, semiconductor memory and PCB names.As a result, we believe that HSI is no longer a reliable benchmark for capturing “growth beta” in Hong Kong equities.

Market Strategy – When the Index Falls Behind – HSI Distortion in an AI-Driven Market

<ul><li>We believe 2026 will be a pivotal year for competing for user mindshare in the AI era, with key focuses on lowering AI adoption thresholds, improving decision-making efficiency, and creating real value.</li><li>Among traditional internet businesses, companies that possess these three characteristics are expected to have higher long-term investment value: 1) stable cash flow to support AIrelated investment and exploration; 2) rich application scenarios to accumulate data and reach users; and 3) outstanding supply chain capabilities and operational excellence to drive overseas expansion for incremental growth.</li><li>We still recommend adopting a barbell investment strategy, while focusing on both the certainty of profit growth and new increments brought by AI. </li></ul>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.

We believe 2026 will be a pivotal year for competing for user mindshare in the AI era, with key focuses on lowering AI adoption thresholds, improving decision-making efficiency, and creating real value.Among traditional internet businesses, companies that possess these three characteristics are expected to have higher long-term investment value: 1) stable cash flow to support AIrelated investment and exploration; 2) rich application scenarios to accumulate data and reach users; and 3) outstanding supply chain capabilities and operational excellence to drive overseas expansion for incremental growth.We still recommend adopting a barbell investment strategy, while focusing on both the certainty of profit growth and new increments brought by AI. 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.

Internet - 2026 Outlook- Bridging legacy and future: A pivotal year

<ul><li>Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due to intensifying competition among marketplace platforms.</li><li>Expanding quality supply, reducing merchant costs, and increasing core user transaction frequency are the priorities.</li><li>Looking ahead, we believe subsectors and companies having strong business model moats and less vulnerable to subsidy-driven competition may outperform, while firms with established ecosystems/network effects, higher margins, and substantial absolute profits will likely have stronger competitive positioning. </li></ul>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.

Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due to intensifying competition among marketplace platforms.Expanding quality supply, reducing merchant costs, and increasing core user transaction frequency are the priorities.Looking ahead, we believe subsectors and companies having strong business model moats and less vulnerable to subsidy-driven competition may outperform, while firms with established ecosystems/network effects, higher margins, and substantial absolute profits will likely have stronger competitive positioning. 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.

Internet - Business Model/Competitive Barrier Back in Focus

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)

Alibaba (BABA US) - Strong Cloud Business Development Prospects

Adjusted EBITA for the quarter was RMB5.1bn, down 84% YoY, mainly due to investments in technology businesses, quick commerce, and user experience,...

CMB International

Internet - Implications from Earnings Beats by North American Cloud Majors

The latest 2Q26 results from major overseas cloud service providers (Amazon, Microsoft and Google) highlighted that ROI in AI-related investment...

CMB International

Market Strategy – When the Index Falls Behind – HSI Distortion in an AI-Driven Market

In 1H26, the Hang Seng Index (HSI) has shown a moderate correction but highly distorted signal, declining by ~3,450 points from 26,338 to 22,881...

Quam Securities

Internet - 2026 Outlook- Bridging legacy and future: A pivotal year

We believe 2026 will be a pivotal year for competing for user mindshare in the AI era, with key focuses on lowering AI adoption thresholds,...

CMB International

Internet - Business Model/Competitive Barrier Back in Focus

Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due...

CMB International

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