BofA Securities released a research report on BABA-W (09988.HK)  +0.700 (+0.615%)    Short selling $2.28B; Ratio 27.268%   (BABA.US)      , of which core e-commerce and cloud business development remained on track. For 4FQ ending in March, Alibaba Cloud's revenue grew by 18% YoY, with adjusted EBITA soaring 69%. Although this was below some investors' higher expectations, management revealed that AI-related products have been gradually launched after the Lunar New Year.

It is expected that cloud business revenue will continue to accelerate in growth over the next few quarters. The previously announced RMB380 billion capex plan remained intact, which was expected to partially alleviate investors' concerns.

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Last quarter, core CMR accelerated to a 12% YoY growth. BofA Securities largely maintained its revenue forecast for FY2026-27. Due to potential increased investment in Taobao's insta-shopping/ food delivery business, the adjusted net profit forecast was revised down by 3-5%. The target price for H shares was slightly lowered from HKD142 to HKD141.

BofA Securities expressed optimism about the improvement in Alibaba's core e-commerce business momentum, the long-term growth theme of AI, and the catalytic effects brought by more consumption-stimulating policies, reaffirming the Buy rating on Alibaba.
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