Daily Investment Strategy
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Alibaba(9988): quarterly results ending December 31, 2025, were weak, falling short of market expectations. Quarterly revenue was RMB 284.843 billion, a slight increase of only 2% year-on-year. Profits were significantly pressured due to substantial investments in instant retail, user experience, and technology R&D: operating profit plummeted 74% year-on-year to RMB 10.645 billion, and non-GAAP net profit also declined by 67% to RMB 16.71 billion. This reflects the Group's willingness to sacrifice short-term profits for strategic development amidst fierce market competition.
The Fed's Hawkish Stance and the Impact of Oil Prices
Amidst geopolitical conflicts driving up oil prices and the latest PPI indicating a resurgence of inflation, the Federal Reserve's post-meeting statement maintained interest rates unchanged. However, the dot plot only foreshadowed a single 25bps rate cut this year, a significantly more hawkish stance than the market's previously optimistic expectations of multiple rate cuts, triggering a repricing of risk assets. The Middle East conflict has pushed Brent crude oil close to $110 per barrel, while the Fed's upward revision of its 2026 PCE inflation forecast indicates growing concerns among policymakers about imported inflation. The upcoming earnings season will further scrutinize companies' ability to balance cost pass-through with demand resilience.
Hong Kong Stock Connect saw a net inflow of HK$26.2bn on Thursday. The Tracker Fund of Hong Kong (2800) saw the largest inflow at HK$14.65bn, followed by the Hang Seng China Enterprises Fund (2828). Xiaomi Group-W (1810) recorded the largest net outflow at HK$870mn, followed by SMIC (0981).
Leung Kai Tong 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/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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