"Forecast" Brokers expect Alibaba's adjusted net profit for the last quarter to decline by over 43% year-on-year, focusing on AI, instant retail investments, and the spin-off plan for "Pingtouge."

AASTOCKS
2026.03.12 06:35

Alibaba-W (09988.HK) will announce its third fiscal quarter results for the fiscal year 2026 ending December 2025 next Thursday (19th). Due to weak consumption in the mainland and intense industry competition, it is expected that the growth of its China e-commerce Customer Management Revenue (CMR) will slow down (affected by the base of payment processing fees starting from September 2024 and the impact of full-site push technology). Losses in instant e-commerce and investments in artificial intelligence will offset the stable growth factors in cloud business. According to the forecasts of eight brokerages, Alibaba's non-GAAP net profit for the third fiscal quarter of 2026 is expected to be between RMB 25.099 billion and RMB 31.858 billion, compared to RMB 51.066 billion in the same period last year, representing a year-on-year decline of 37.6% to 50.8%, with a median of RMB 28.936 billion, down 43.3% year-on-year, and an increase of nearly 1.8 times quarter-on-quarter (compared to the adjusted net profit of RMB 10.352 billion in the second fiscal quarter).

According to forecasts from 14 brokerages, Alibaba's adjusted EBITA for the third fiscal quarter of 2026 is expected to be between RMB 24.264 billion and RMB 33.7 billion, compared to RMB 54.853 billion in the same period last year, representing a year-on-year decrease of 38.64% to 55.8%, with a median of RMB 27.585 billion, down 49.7% year-on-year. Based on the forecasts of 15 brokerages, Alibaba's revenue for the third fiscal quarter of 2026 is expected to be between RMB 285.459 billion and RMB 295 billion, compared to RMB 280.154 billion in the third fiscal quarter of 2025, representing a year-on-year increase of 1.9% to 5.3%, with a median of RMB 289.302 billion, up 3.3% year-on-year.

Investors will focus on the group's increased investments in artificial intelligence and instant retail, both of which have led to increased losses in the "other businesses" segment. They will observe the slowdown in Alibaba's e-commerce Customer Management Revenue (CMR) growth in the last fiscal quarter and its outlook guidance, the growth of Taobao Flash GMV, subsidies, and future operational synergies (how to strengthen TaoTian, TaoShan, Fliggy, and Amap, etc.). The market will also pay attention to the instant e-commerce strategy, how the company gradually shifts its focus to optimizing unit economics and operational efficiency, the growth of cloud business, GPU supply, AI business capital expenditures, operational conditions and strategies for Qianwen, and the progress of the potential spin-off of the chip business "Pingtouge" for independent listing.

【Expected low growth in China e-commerce CMR, narrowing losses in instant e-commerce】

Morgan Stanley predicts that Alibaba's non-GAAP net profit for the last fiscal quarter will be RMB 31.858 billion, down 44.6% year-on-year, estimating revenue for the quarter at RMB 286.2 billion, up 2.2% year-on-year, with cloud intelligence group revenue expected to grow over 35% year-on-year, reinforcing its argument as "China's best AI enabler." It is expected that the growth rate of related businesses will accelerate to 40% in the fiscal year 2027, while the EBITA profit margin for cloud intelligence business remains stable at 9% (consistent with the growth rate of the previous quarter). However, it is worth noting that due to weak consumption in the mainland, its core e-commerce business has begun to deteriorate, with Alibaba's Customer Management Revenue (CMR) expected to record RMB 105.736 billion, a year-on-year growth of 3% (compared to a CMR growth rate of 10% in the second fiscal quarter of 2026), leading to a 3% decline in EBITA for the China e-commerce business (excluding instant retail), and it is estimated that losses in instant retail will narrow to RMB 23 billion (compared to a loss of RMB 35 billion in the second quarter of 2026), resulting in the EBITA for its China e-commerce group recording RMB 36.009 billion, up 2.4 times quarter-on-quarter (down 41% year-on-year) Morgan Stanley estimates that Alibaba's cloud growth will remain strong, with the company previously stating that its capital expenditure guidance for the next three years may remain above RMB 380 billion. The company has recently accelerated its AI 2C projects, including upgrading the Qianwen application, rebranding Quark, launching Quark glasses, and upgrading the Gaode Map rating system.

UBS predicts Alibaba's quarterly revenue will increase by 2% year-on-year to RMB 285.4 billion, partly affected by the exclusion of first-party offline retail assets from consolidation. The gross merchandise volume growth forecast for China's e-commerce is expected to remain flat year-on-year, while customer management revenue is expected to increase by 1% year-on-year. The bank predicts that Taotian Group's business EBITA will decline by 7% year-on-year, with instant e-commerce EBITA losing RMB 25 billion, and the entire department's quarterly EBITA is expected to be RMB 32 billion. Cloud business quarterly revenue is expected to increase by 36% year-on-year, accelerating by 3 percentage points quarter-on-quarter, driven by sustained strong external demand. EBITA margin is expected to remain at 9%.

Daiwa noted that Alibaba's China e-commerce customer management revenue growth in the quarter fell short of expectations, expected to rise only 2% year-on-year, slowing down by 8 percentage points quarter-on-quarter, mainly due to macro weakness and intensified competition among platforms. In terms of instant e-commerce, the bank stated that the company prioritizes order volume and gross merchandise volume market share, seeking to ultimately become a leader, with continued investment in high-end non-food categories. However, it believes that cloud business revenue will grow by 35% year-on-year, accelerating by 1 percentage point quarter-on-quarter, driven by internal AI usage and external demand. The bank predicts that the company's adjusted quarterly EBITA will decline by 39% year-on-year to RMB 33.3 billion, with instant e-commerce EBITA narrowing its loss to RMB 20 billion, along with slowing customer management revenue growth, user experience investment, and competition, leading to a quarterly EBITA for China's e-commerce expected to drop to RMB 38.7 billion.

HSBC Global Research reported in early January that the AI theme is expected to continue driving Alibaba's growth. According to the market share of China's cloud market in the first half of last year, Alibaba Cloud reached 36%, ranking first in the industry (ByteDance's Volcano Engine at 15%, Huawei Cloud at 13%, Tencent Cloud at 7%). Based on the consumption tokens of enterprise model as a service (MaaS) in China in the first half of last year, Qianwen accounted for 18% (ByteDance's Doubao at 14%, DeepSeek at 10%). Based on the estimated daily average orders for instant retail in mainland China in the fourth quarter of 2025, Alibaba's related daily average orders are expected to be 72 million (compared to Meituan and JD's 84 million and 17 million during the same period), with Alibaba expected to incur a loss of RMB 15 billion in instant retail in the fourth quarter of 2025 (compared to a loss of RMB 19 billion in the third quarter of 2025; the bank expects Meituan and JD to incur losses of RMB 21 billion and RMB 7 billion in instant retail in the fourth quarter of 2025). When considering the unit economics of the takeaway business, HSBC Global Research expects Alibaba, Meituan, and JD to all record losses, estimating that Meituan loses about RMB 2 per order, the least among the three companies, followed by Alibaba with losses exceeding RMB 2 per order.

---------------------------------------------------

According to the forecasts of eight brokerages, Alibaba's non-GAAP net profit for the third fiscal quarter of fiscal year 2026 is expected to be between RMB 25.099 billion and RMB 31.858 billion, compared to RMB 51.066 billion in the same period last year, representing a year-on-year decline of 37.6% to 50.8%, with a median of RMB 28.936 billion Falling 43.3% year-on-year, but up nearly 1.8 times quarter-on-quarter (compared to the adjusted net profit of RMB 10.352 billion in the second fiscal quarter).

Brokerage│2026 Fiscal Year Third Quarter Non-GAAP Net Profit Forecast (RMB)│Year-on-Year Change

Morgan Stanley│31.858 billion yuan│-37.6%

Shenwan Hongyuan│29 billion yuan│-41.4%

Daiwa│29.743 billion yuan│-41.8%

Citigroup│28.692 billion yuan│-43.8%

Haitong International│29.041 billion yuan│-43.1%

CICC│28.83 billion yuan│-43.5%

UBS│26.373 billion yuan│-48.4%

Citi│25.099 billion yuan│-50.8%

Based on the company's 2025 fiscal year third quarter non-GAAP net profit of RMB 51.066 billion

---------------------------------------------------

According to the forecasts of 14 brokerages, Alibaba's adjusted EBITA for the 2026 fiscal year third quarter is expected to be between RMB 24.264 billion and RMB 33.7 billion, compared to RMB 54.853 billion in the same period last year, a year-on-year decrease of 38.64% to 55.8%, with a median of RMB 27.585 billion, a year-on-year decrease of 49.7%.

Brokerage│2026 Fiscal Year Third Quarter Adjusted EBITA Forecast (RMB)│Year-on-Year Change

China Merchants Securities International│33.7 billion yuan│-38.6%

Daiwa│33.262 billion yuan│-39.4%

HSBC Global Research│32 billion yuan│-41.7%

Morgan Stanley│30.373 billion yuan│-44.6%

CMB International│29.588 billion yuan│-46.1%

CICC│27.67 billion yuan│-49.6%

Haitong International│27.157 billion yuan│-50.5%

Citi│26.438 billion yuan│-51.8%

Barclays│26.283 billion yuan│-52.1%

Citigroup│27.733 billion yuan│-49.4%

Jefferies│27.5 billion yuan│-49.9%

Nomura│26.799 billion yuan│-51.1%

Huatai Securities│25.9 billion yuan│-52.8%

UBS│24.264 billion yuan│-55.8%

Based on the company's 2025 fiscal year third quarter adjusted EBITA of RMB 54.853 billion

---------------------------------------------------

According to the forecasts of 15 brokerages, Alibaba's revenue for the 2026 fiscal year third quarter is expected to be between RMB 285.459 billion and RMB 295 billion, compared to RMB 280.154 billion in the third quarter of the 2025 fiscal year, a year-on-year increase of 1.9% to 5.3%, with a median of RMB 289.302 billion, a year-on-year increase of 3.3%.

Brokerage│2026 Fiscal Year Third Quarter Revenue Forecast (RMB)│Year-on-Year Change HSBC Global Research │ CNY 295 billion │ +5.3%

Barclays │ CNY 293.628 billion │ +4.8%

CICC │ CNY 293.055 billion │ +4.6%

China Merchants Securities International │ CNY 292.2 billion │ +4.3%

Daiwa │ CNY 290.368 billion │ +3.6%

Huatai Securities │ CNY 290.064 billion │ +3.5%

Citigroup │ CNY 289.793 billion │ +3.4%

Haitong International │ CNY 289.302 billion │ +3.3%

Citi │ CNY 288.833 billion │ +3.1%

China Jianyin Investment │ CNY 287.182 billion │ +2.5%

Jefferies │ CNY 287 billion │ +2.4%

Nomura │ CNY 286.638 billion │ +2.3%

Shenwan Hongyuan │ CNY 286.6 billion │ +2.3%

Morgan Stanley │ CNY 286.2 billion │ +2.2%

UBS │ CNY 285.459 billion │ +1.9%

Based on the company's revenue of CNY 280.154 billion for the third quarter of the 2025 fiscal year

Source: AASTOCKS The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
© 2026 Longbridge｜Disclaimer