Key Takeaways
UOB Kay Hian named Alibaba (9988.HK) its top pick among Chinese internet stocks, citing growth in artificial intelligence and cloud computing while maintaining a HKD 192 price target.
"We continue to view AI cloud as the preferred sub-sector within China’s internet sector," UOB Kay Hian said in a research report published Tuesday.
The brokerage reiterated "Buy" ratings on Tencent (0700.HK) and Baidu (9888.HK) with price targets of HKD 728 and HKD 170, respectively. The firm's top pick, Alibaba, was also kept at a "Buy" rating, driven by what the bank sees as accelerating cloud revenue growth and margin expansion.
The report highlights that intensifying competition from players like DeepSeek and Moonshot AI is forcing major platforms to accelerate commercialization. In response, Alibaba has restructured its Tongyi Qianwen model to better integrate with its cloud and chip divisions, while Tencent is working to roll out more agent-based products.
The analysis suggests investor focus over the next six to 12 months will be on cloud revenue growth, the launch of AI agent-based applications, and the commercialization of large language models. Investors will be watching for Alibaba's progress in integrating its AI and cloud services to see if the firm can capitalize on its "top pick" status.
This article is for informational purposes only and does not constitute investment advice.
