JP Morgan: BABA-W (09988) long-term value story remains unchanged, maintains "overweight" rating, target price of 200 Hong Kong dollars.

J.P. Morgan has released a research report stating that at the investor conference after BABA-W (09988) earnings, there is greater confidence in the strategic logic of their investment story, but there has not been a significant increase in confidence in the short-term stock price reappraisal. Management indicated that the current profit pressure is a strategic result of increasing investments in AI, cloud, and instant commerce, rather than evidence of weakened competitiveness or failure of business model. The bank maintains a "overweight" rating on Alibaba's H shares with a target price of HK$200. The conference clarified the reasons why the management is willing to bear short-term profit pressure, and why they believe these investments can create medium-term value. However, a clearer strategy does not necessarily mean clearer financial data for the stock price, so the conference supports the outlook for the next 12 months, but is not enough to change the pattern of relying on performance proof in the next 3 months. Management emphasized that "cloud + AI" remains the highest strategic priority for the group, positioning the group not only in building infrastructure, but also covering AI platforms that include models, platform tools, and downstream monetization. The bank believes this is the most important information, as Alibaba does not want investors to see cloud business only as traditional infrastructure business, but as a complete AI platform with potential monetization through model services, token consumption, and application usage. In terms of instant commerce, management believes that ecosystem value assessment should be emphasized, rather than just focusing on short-term profit and loss impacts. This business is becoming an important part of the domestic e-commerce architecture through improving user acquisition, frequency, category expansion, and platform participation. The bank is more optimistic about the next 12 months, noting that Alibaba is simultaneously establishing scale in AI infrastructure, model services, applications, and e-commerce distribution. If the company can maintain accelerated growth in cloud business, clearer AI monetization, and demonstrate a credible path to improving real-time commerce unit economics, the market will be more willing to value Alibaba beyond its core e-commerce profitability framework. The conference has strengthened confidence in the long-term value creation framework, but the need for short-term execution proof has not been eliminated.