Daily Investment Strategy
Daily focus：Alibaba（9988）
Alibaba announced on the evening of the 24th that it plans to invest at least RMB380bn over the next three years to advance its cloud computing and AI infrastructure, reinforcing its commitment to long-term technological innovation and underscoring the Company’s focus on AI-driven growth and its role as a leading global cloud provider. Alibaba's cloud business revenue returned to double-digit growth of 13% in the latest quarter, with AI-related product revenues achieving triple-digit growth for six consecutive quarters. Alibaba Cloud continues to lead the Chinese cloud market. The rise of large models like DeepSeek in China can accelerate the deployment of AI applications domestically. Cloud platform, serves as the foundation for AI development, will benefit from the continuous growth in usage by consumers and enterprises, allowing Alibaba to be among the first to benefit. Additionally, we have previously mentioned that Alibaba's AI technology has significant advantages in enhancing business efficiency, including adoption of " Quanzhantui" that can stimulate GMV growth. This means Alibaba can monetize its technology, which, in the long term, can convince the capital market to give Alibaba a higher valuation. Alibaba's latest quarterly e-commerce business performance has satisfied the market, with Taobao's customer management revenue increasing by 9% to RMB100.79bn, mainly driven by online GMV growth and an increase in take rates. The rise in take rates is due to the full-quarter impact of basic software service fees and the increased penetration rate of Quanzhantui. Recently, insiders revealed that since DeepSeek gained global attention last month, Tencent, Alibaba, and ByteDance have significantly increased their orders for H20 chips. This reflects the increased efforts by China's tech giants in the AI sector, and Alibaba's massive investment demonstrates its determination, enabling the group to better seize the opportunities brought by the AI wave. Target price is HK$155.
S&P 500 falls for four straight days as consumer confidence data disappoints
On Tuesday, the S&P 500 fell for a fourth straight session as worries about economic growth and global trade deepened. The S&P 500 index fell 0.47% to close at 5,955 points. The Nasdaq Composite Index fell 1.35% to end the day's trading at 19,026 points. Nvidia's stock price continued to fall after a Bloomberg report said the White House is seeking to tighten controls on China's exports of semiconductor technology, especially Nvidia's chips. Consumer confidence fell to 98.3 in February, well below estimates of 102.3 and the largest monthly decline since August 2021. The recent string of disappointing data includes last week's manufacturing and retail sales figures. In addition, Wal-Mart's forward guidance also intensified the market's concerns about consumer sentiment and the economy.
Hong Kong Stock Connect had a net inflow of HK$22.0bn Tuesday of which Alibaba (9988) had the largest net inflow, reaching HK$6.6bn; followed by Tracker Fund (2800). Hua Hong (1347) recorded the largest net outflow at $0.59bn, followed by Meituan (3690).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
The materials contained herein are provided by KGI Asia Limited ("KGI") for information only. While such materials are based on or derived from sources believed to be reliable, KGI makes no representation or warranty (express or implied) as to their accuracy or reliability. Neither the information nor the opinions expressed herein constitute, or are to be construed as, an offer or invitation or solicitation of an offer to buy or sell any securities or investments. KGI and its officers, employees, agents and affiliates may have interests in the securities or investments covered herein and accept no liability whatsoever for any loss or consequence whatsoever (whether direct or indirect) resulting from any use of or reliance by you on such materials.
