Guosen: BABA-W (09988) is about to release its second quarter financial report for fiscal year 2026, maintaining a "outperform" rating in the market.

Guosen released a research report stating that it maintains a "better than market" rating for BABA-W (09988), with a slight adjustment to the company's revenue forecast for FY2026-FY2028 to 105.03/118.79/130.50 billion yuan. This is mainly due to the low revenue contribution of the instant retail business in the investment phase. The company's adjusted net profit forecast for FY2026-FY2028 is 108.4/150.2/177.2 billion yuan, primarily due to the high investment intensity in the flash purchase business exceeding the previous expectations of the bank, as well as increased investment in model and AI application related computing power in all other businesses, and increased investment in the home delivery and store delivery business of High German Box Horse, which is expected to be sustainable. The report mentions that Alibaba is about to release its financial report for the second quarter of the 2026 fiscal year. The bank expects a 4% year-on-year increase in revenue for 2QFY26, with an adjusted EBITA margin of 3.5%. For 2QFY26, the bank predicts that Alibaba will achieve revenue of 245.6 billion yuan, YoY +4%, with international digital business group/cloud intelligence revenue increasing by +17%/30% year-on-year, and Chinese e-commerce group revenue decreasing by -13% month-on-month. The adjusted EBITA for 2QFY26 is 8.5 billion yuan, a year-on-year decrease of 79%, with an adjusted EBITA margin of 3.5%, a year-on-year decrease of 13.6 percentage points, mainly due to the peak period of investment in the flash purchase business in Q3 and increased demand for computing power for model training and AI application in other businesses.