Daily Investment Strategy
Daily focus：Alibaba（9988）
Alibaba released its fiscal year 2026 first quarter earnings report, with total revenue reaching RMB 247.7 billion, a year-on-year increase of 2%, slightly below market expectations. However, excluding revenue no longer consolidated in the financial statements, revenue increased by 10% year-on-year. The China e-commerce business maintained steady growth, with revenue reaching RMB 140.1 billion, including a 10% increase in core commerce revenue; international digital commerce grew by 19%; cloud computing business revenue reached RMB 33.4 billion, a significant 26% year-on-year increase, and cloud business gross margin continued to improve. On net profit, non-GAAP net profit was RMB 35.3 billion, down 12.4% year-on-year, mainly due to a significant increase in sales and marketing expenses. Overall, Alibaba faces intense competitive pressure and short-term investment stress, but revenue growth remains resilient. Cloud business and core e-commerce business performance are stable and have growth potential. The investments in instant retail and new businesses bring short-term losses but are expected to improve with operational efficiency.
Core PCE inflation rose to 2.9%
After Federal Reserve Chair Jerome Powell signaled a policy shift at the Jackson Hole conference, market expectations for a rate cut in September have soared to 89%, becoming the core macro factor driving global markets. Although July's PCE inflation data showed the core inflation rate slightly rising to 2.9%, which is still above the Fed’s 2% target, signs of labor market weakness are also drawing attention, especially amid significant downward revisions to employment data. Additionally, judicial setbacks to the Trump administration’s tariff policy further strengthen rate cut expectations, as a federal appeals court ruled most tariffs illegal but allowed them to remain in effect until October or until the final ruling. This development reduces the risk of inflation rising further.
On Friday, the Hong Kong Stock Connect recorded a net inflow of HKD 12 billion, with Tencent Holdings (700) seeing the largest net inflow of HKD 1.58 billion, followed by Alibaba (9988). On the other hand, Xiaomi Group (1810) had the largest net outflow of HKD 860 million, followed by New China Life Insurance (1336).
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.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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