CICC's report pointed out that recently Alibaba (09988.HK) has taken a series of measures to protect the rights and interests of merchants, reduce the threshold for merchants, and lower operating costs. They have relaxed the policy of only providing refunds, launched a return treasure program to reduce the cost of returns and refunds for merchants. By replacing DSR with experience points, Alibaba has integrated WeChat Pay to bring additional volume to merchants, encouraging merchants to provide good service to users.

The bank maintains its revenue and EBITA forecasts for Alibaba unchanged, and raises Alibaba's 2025 fiscal year non-GAAP net profit by 3% to 160.5 billion yuan, mainly due to the fading of the base effect of one-time expenses in the same period last year.

Recently, Alibaba's performance has lagged behind the sector. The bank believes this is partly due to the pullback after a significant increase at the end of September, and partly because Alibaba's investment logic differs from some companies with fully verified competitive patterns. The focus is on the stabilization and recovery of the e-commerce business, which requires validation following the fundamentals to push the logic to a new stage. The bank maintains the stock's target price of $112 for US stocks and HK$109 for Hong Kong stocks.