恒生指数、恒生科技指数日内双双涨超1%，安踏体育(02020.HK)涨超4.5%，百度(09888.HK)涨近4%， 阿里巴巴(09988.HK)、携程集团(09961.HK)、阿里健康(00241.HK)均涨超3%。 ...

Investment Rating - The report indicates a positive investment outlook for the AI healthcare industry, highlighting significant growth potential and increasing investment activity in the sector [3][10][46]. Core Insights - The AI healthcare sector is entering a new phase characterized by multi-modal integration and practical applications, driven by advancements in large models and generative AI [3][7]. - Clinical decision support and drug development are leading the commercialization efforts, while health management remains an area with untapped potential [3][14]. - The report emphasizes the importance of third-party vendors in reducing model hallucination rates and enhancing the reliability of AI applications in healthcare [3][18][21]. Summary by Sections AI Healthcare Trends - The industry is experiencing heightened investment interest and technological advancements, with major players accelerating their presence in the AI healthcare space [9][10][13]. - The integration of AI into clinical workflows is becoming standard, with AI-assisted diagnosis systems deployed in 89% of tertiary hospitals [8][14]. AI Healthcare Application Penetration - AI applications are diversifying across clinical diagnosis, drug development, health management, and AI for science (AI4S), with varying levels of maturity and market potential [30][31]. - The report identifies key areas of application, including intelligent clinical decision support, drug discovery, and personalized health management [36][39]. Key Companies in AI Clinical Diagnosis - Companies like Tempus AI and 嘉和美康 are leading in AI-assisted clinical diagnosis, focusing on electronic medical records and data-driven healthcare solutions [47][51]. - The report highlights the importance of data barriers and scenario positioning in determining the value of AI diagnostic tools [3][46]. Key Companies in AI Health Management - Companies such as 阿里健康 and 京东健康 are leveraging AI to enhance online healthcare services, with a focus on chronic disease management and personalized health plans [39][44]. - The report notes that the integration of insurance and healthcare services is crucial for the growth of AI health management solutions [39][44]. Key Companies in AI Drug Development - The report discusses the role of AI in accelerating drug development processes, with companies like Recursion and 晶泰控股 focusing on preclinical research and drug discovery [38][44]. - AI is expected to significantly reduce the time and cost associated with traditional drug development methods [38][44]. AI4S and Broader Applications - AI4S is identified as a growing field with applications in various scientific domains, including life sciences and materials science, although it faces longer conversion cycles [42][44]. - The report emphasizes the need for innovative approaches to data generation and modeling in AI4S applications [42][44].

Group 1 - The top three companies with the highest short positions are WuXi AppTec (22.57%), CATL (17.76%), and COSCO Shipping Holdings (14.27%) [1][2] - The companies with the largest absolute increase in short positions are Alibaba Health (4.45%), China Liansu (2.54%), and Hong Kong Travel (2.02%) [1][2] - The companies with the largest absolute decrease in short positions are Far East Horizon (-1.62%), ZhongAn Online (-1.55%), and Rongchang Biologics (-1.32%) [1][3] Group 2 - The latest short position data shows that WuXi AppTec has 87.35 million shares, CATL has 27.69 million shares, and COSCO Shipping Holdings has 411 million shares [2] - Alibaba Health's short position increased from 6.97% to 11.42%, while China Liansu's increased from 0.61% to 3.15% [2] - Far East Horizon's short position decreased from 4.43% to 2.82%, and ZhongAn Online's decreased from 7.43% to 5.88% [3][4]

[Chairman's Report](index=6&type=section&id=Chairman%27s%20Report) [Pharmaceutical E-commerce Business](index=7&type=section&id=Chairman%27s%20Report-Pharmaceutical%20E-commerce%20Business) The pharmaceutical e-commerce business solidified its industry-leading position by optimizing the supply chain and integrating marketing services for multi-driven growth - Signed strategic collaborations with multiple renowned pharmaceutical companies to enhance drug accessibility in outpatient and lower-tier markets, expanding online retail, product categories, and new drug launches[12](index=12&type=chunk) - After acquiring exclusive marketing review rights for Ali Mama's healthcare category, marketing services were integrated into a closed loop, forming a multi-driven model of "self-operated revenue + platform commission + marketing services" to enhance merchant stickiness and drive business growth[13](index=13&type=chunk) [Healthcare and Digitalization Business](index=8&type=section&id=Chairman%27s%20Report-Healthcare%20and%20Digitalization%20Business) The Group enhanced online healthcare services with AI, expanded professional talent to nearly 240,000, and advanced drug traceability Healthcare and Digitalization Business Key Metrics (As of March 31, 2025) | Business Segment | Key Metric | Data | | :--- | :--- | :--- | | **Healthcare Service Platform** | Contracted licensed physicians, pharmacists, and nutritionists | Nearly **240,000** | | **Xiaolu Traditional Chinese Medicine Business** | Registered Traditional Chinese Medicine practitioners | **140,000** | | **Xiaolu Traditional Chinese Medicine Business** | National dispensing center network | **137** | - Firmly committed to big data and AI technology as core drivers, enabling AI across the entire pharmaceutical e-commerce value chain, improving operational efficiency and GMV growth Future plans include continuous exploration of large models in healthcare services[21](index=21&type=chunk) - The "Ma Shang Fang Xin" platform actively responded to national drug traceability policies, promoting full value chain coverage for drug production, circulation, and retail pharmacies/medical institutions, enhancing supply chain transparency, security, and compliance[20](index=20&type=chunk) [Public Welfare](index=9&type=section&id=Chairman%27s%20Report-Public%20Welfare) Ali Health actively fulfilled social responsibility by focusing on vulnerable groups' health and integrating public welfare into its corporate strategy - Launched multiple public welfare initiatives, including the "Lemon Baby Care Action" to ensure access to special medical food for children with rare diseases, the "Hearing Aid Action" providing hearing tests for over **5,000** elderly individuals, and "Blind Assistance Medical Examinations" offering customized check-ups for **500** visually impaired people[25](index=25&type=chunk) - Upgraded and launched the "1–5–100 Public Welfare Program," guided by "1 Ali Health Public Welfare Forest, 5 business-related public welfare projects, and 100 employee families participating," integrating social responsibility into the corporate DNA[26](index=26&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Financial Summary](index=11&type=section&id=Business%20Review) In FY2025, the company achieved robust business growth with total revenue up 13.2% and net profit up 62.2%, driven by policy and AI Financial Highlights (FY2025, RMB) | Financial Metric | FY2025 (RMB) | Year-on-Year Growth | | :--- | :--- | :--- | | **Total Revenue** | **30.598 billion yuan** | +13.2% | | **Net Profit** | **1.432 billion yuan** | +62.2% | | **Adjusted Net Profit** | **1.950 billion yuan** | +35.6% | | **Adjusted Net Profit Margin** | **6.4%** | Up from 5.3% | Operational Highlights (As of March 31, 2025) | Operational Metric | Data | Year-on-Year Growth | | :--- | :--- | :--- | | **Tmall Health Platform - Online Key Merchants** | **48,300** | +35% | | **Tmall Health Platform - Online SKUs** | **133 million** | +91% | | **Online Self-operated Stores - Self-operated SKUs** | **1.23 million** | +33.6% | - The company's strategy is based on "Cloud Infrastructure," with "Cloud Pharmacy" as the core and "Cloud Hospital" as the engine, providing inclusive, efficient, and safe healthcare services for families[36](index=36&type=chunk) [Business Segment Performance](index=13&type=section&id=Business%20Segment%20Performance) All Group business segments made significant progress this fiscal year, with strong growth in pharmaceutical e-commerce, expanded healthcare services, and enhanced digital traceability [Pharmaceutical E-commerce Business](index=13&type=section&id=Pharmaceutical%20E-commerce%20Business) Pharmaceutical e-commerce, a core segment, achieved steady growth through platform and self-operated models, expanding services and improving logistics Pharmaceutical E-commerce Business Metrics (As of March 31, 2025) | Business Segment | Metric | Data | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | **Pharmaceutical E-commerce Platform** | Online Key Merchants | **48,300** | +35% | | **Pharmaceutical E-commerce Platform** | Online SKUs | **133 million** | +91% | | **Pharmaceutical Self-operated Business** | Revenue | **26.124 billion yuan** | +10.0% | | **Pharmaceutical Self-operated Business** | SKU Quantity | **1.23 million** | +33.6% | - Next-day home delivery service for self-operated pharmaceutical business has gradually expanded to **13** cities including Guangzhou, Ningbo, and Jinhua[45](index=45&type=chunk) [Healthcare and Digital Services Business](index=14&type=section&id=Healthcare%20and%20Digital%20Services%20Business) Healthcare services upgraded with increased professionals and AI integration, while digital traceability expanded its value chain coverage and efficiency - As of March 31, 2025, the total number of contracted licensed physicians, pharmacists, and nutritionists increased to nearly **240,000**[46](index=46&type=chunk) - Xiaolu TCM launched an AI-assisted diagnosis and treatment system based on Alibaba Cloud Bailian Platform and DEEPSEEK large models, improving doctors' auxiliary consultation efficiency[47](index=47&type=chunk) - The "Ma Shang Fang Xin" platform launched "Drug Circulation Compliance Digitalization" services, serving over **1,500** manufacturing enterprises and over **7,100** distribution enterprises, with over **8.5 million** electronic drug inspection reports cumulatively sent[50](index=50&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) In FY2025, the Group's total revenue grew 13.2% to 30.60 billion yuan, with gross profit up 26.1% and net profit surging 62.2% to 1.43 billion yuan Consolidated Financial Performance (RMB '000) | Financial Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | **30,598,292** | 27,026,555 | 13.2 | | **Gross Profit** | **7,432,091** | 5,895,321 | 26.1 | | **Profit Before Tax** | **1,559,968** | 939,399 | 66.1 | | **Profit for the Year** | **1,432,014** | 883,136 | 62.2 | | **Profit Attributable to Owners of the Parent** | **1,432,427** | 883,477 | 62.1 | | **Adjusted Net Profit** | **1,949,673** | 1,437,928 | 35.6 | Revenue by Segment (RMB '000) | Revenue Segment | 2025 (RMB '000) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | **Pharmaceutical Self-operated Business** | **26,124,420** | 10.0 | | **Pharmaceutical E-commerce Platform Business** | **3,588,499** | 54.0 | | **Healthcare and Digital Services Business** | **885,373** | -7.6 | - Gross margin increased by **2.5** percentage points to **24.3%**, primarily due to optimized operational efficiency and enhanced pricing power from refined operations and digital upgrades[66](index=66&type=chunk) - Fulfillment expenses as a percentage of self-operated pharmaceutical business revenue decreased from **10.2%** to **9.8%**, reflecting improved operational efficiency in warehousing, logistics, and customer service[69](index=69&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Financial%20Resources%2C%20Liquidity%20and%20Foreign%20Exchange%20Risk) As of March 31, 2025, the Group maintained robust liquidity with 2.22 billion yuan in cash, positive operating cash flow, and zero debt Cash Flows (For the Year Ended March 31, RMB '000) | Cash Flow Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | **Net Cash Flows from Operating Activities** | **1,395,033** | 1,079,832 | | **Net Cash Flows Used in Investing Activities** | **(2,596,482)** | (4,880,900) | | **Net Cash Flows Used in Financing Activities** | **(72,517)** | (1,982,395) | | **Cash and Cash Equivalents at Year-End** | **2,218,296** | 3,490,169 | - As of March 31, 2025, the Group had **no outstanding borrowings**, resulting in **no debt-to-capital ratio**[94](index=94&type=chunk) - The Group has **no foreign exchange hedging policy**, but management will closely monitor exchange rate fluctuations to keep risks at a minimum level[99](index=99&type=chunk) - The Board does **not recommend** the payment of a final dividend for the reporting period[107](index=107&type=chunk) [Report of the Directors](index=26&type=section&id=Report%20of%20the%20Directors) [Share Award Scheme](index=33&type=section&id=Share%20Award%20Scheme) The company operates 2014 and 2024 Share Award Schemes to incentivize contributors, with the 2024 scheme authorizing 10% of issued shares - The company adopted the **2024 Share Award Scheme** on **August 30, 2024**, to replace the terminated 2014 scheme, ensuring consistency in share award practices The new scheme is valid for **ten years**[157](index=157&type=chunk) Share Award Scheme Authorized Limits | Scheme Name | Scheme Authorized Limit | Service Provider Sub-limit | | :--- | :--- | :--- | | **2024 Share Award Scheme** | **10%** of issued shares on adoption date (**1,609,173,626 shares**) | **1%** of issued shares on adoption date (**160,917,362 shares**) | - During the reporting period, new share options and restricted share units were granted to Executive Director Mr. Shen Diefan, Mr. Tu Yanwu, and Chairman Mr. Zhu Shunyan, among others[184](index=184&type=chunk) [Connected Transactions](index=47&type=section&id=Connected%20Transactions) The Group conducted various continuing connected transactions with Alibaba Group, all compliant with Listing Rules and deemed fair by independent directors Connected Transactions (Approximate RMB) | Transaction Type | Counterparty | FY2025 Expense/Revenue (Approx. RMB) | | :--- | :--- | :--- | | **Cloud Computing Services** | Alibaba Cloud | Expense **RMB 135 million** | | **Platform Services** | Taobao China, etc. | Expense **RMB 620 million** | | **Logistics Services** | Cainiao Group | Expense **RMB 126 million** | | **Shared Services** | Alibaba Network Group | Expense **RMB 277 million** | | **Framework Technical Services** | Taobao China Co. | Expense **RMB 1.093 billion** | | **Marketing Promotion Services** | Ali Mama | Expense **RMB 2.287 billion** | | **Exclusive Marketing Review Services** | Ali Mama | Revenue **RMB 1.515 billion** | - Independent non-executive directors reviewed all continuing connected transactions and confirmed they were entered into on normal commercial terms in the Group's ordinary course of business, fair and reasonable, and in the overall interest of shareholders[274](index=274&type=chunk)[318](index=318&type=chunk) - The company's auditor, Ernst & Young, issued a letter regarding the continuing connected transactions, confirming that the transactions were approved by the Board, followed pricing policies, did not exceed annual caps, and complied with agreement terms[314](index=314&type=chunk)[321](index=321&type=chunk) [Contractual Arrangements (VIE Structure)](index=58&type=section&id=Contractual%20Arrangements) The Group uses a VIE structure to control restricted businesses and obtain economic benefits due to Chinese foreign investment restrictions, with the Board deeming these arrangements crucial - The VIE structure is adopted to comply with Chinese laws restricting foreign investment in operational internet information services (requiring ICP licenses) to a shareholding ratio of no more than **50%**[275](index=275&type=chunk)[299](index=299&type=chunk) - Core contractual arrangements include: Exclusive Service Agreement, Loan Agreement, Equity Pledge Agreement, Shareholder Voting Rights Proxy Agreement, and Exclusive Call Option Agreement, ensuring that the wholly foreign-owned enterprise can effectively control the operating companies and obtain their economic benefits[287](index=287&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) Operating Companies under VIE Structure (RMB '000) | Operating Company | FY2025 Revenue (RMB '000) | % of Group | Assets as of 2025/3/31 (RMB '000) | % of Group | | :--- | :--- | :--- | :--- | :--- | | **Hongyun Jiukang** | **747,971** | 2.44% | **3,130,192** | 14.78% | | **Ali Health Hebei** | **7,859** | 0.03% | **55,602** | 0.26% | - The Board confirmed the necessity of the contractual arrangements and deemed it inappropriate to set annual caps or a three-year term for them, a view supported by independent financial advisors Independent non-executive directors also reviewed and confirmed the reasonableness of the arrangements[309](index=309&type=chunk)[311](index=311&type=chunk)[318](index=318&type=chunk) [Biographical Details of Directors and Senior Management](index=72&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) [Directors and Senior Management Profile](index=72&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management-Summary) This section provides background and qualifications for the company's directors and senior management, including key executives and the re-designated Chairman - Executive Director and Chief Executive Officer Mr. Shen Diefan has held various senior positions at Alibaba Group and the Company, possessing extensive e-commerce and management experience[336](index=336&type=chunk) - Executive Director and Chief Financial Officer Mr. Tu Yanwu has extensive experience in financial management, auditing, and capital markets, having previously worked at Wuxi AppTec and General Motors[337](index=337&type=chunk) - Chairman Mr. Zhu Shunyan was re-designated from executive director to non-executive director effective **September 1, 2024**, having previously been an Alibaba Partner and held several presidential-level positions at UC Browser and Alibaba Group[338](index=338&type=chunk)[341](index=341&type=chunk) [Corporate Governance Report](index=77&type=section&id=Corporate%20Governance%20Report) [Board and Committees](index=77&type=section&id=Board%20and%20Committees) The company complied with corporate governance codes, maintaining a diverse eight-member Board with separate Chairman and CEO roles, and effective committees - The Board of Directors comprises **eight** directors, including **two** executive directors, **three** non-executive directors, and **three** independent non-executive directors, complying with Listing Rules requirements[361](index=361&type=chunk) - The roles of the Company's Chairman (Mr. Zhu Shunyan) and Chief Executive Officer (Mr. Shen Diefan) are clearly separated with distinct responsibilities[371](index=371&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee are all chaired by independent non-executive directors and held meetings during the reporting period, fulfilling their respective terms of reference[378](index=378&type=chunk)[388](index=388&type=chunk)[393](index=393&type=chunk) - The Board adopted a Board Diversity Policy; as of March 31, 2025, the Board comprised **four** male and **four** female members, ensuring a balanced gender composition[405](index=405&type=chunk) [Shareholder Rights and Communication](index=87&type=section&id=Shareholder%20Rights%20and%20Communication) The company ensures transparent shareholder communication through various channels, outlining procedures for general meetings, proposals, and dividend policy - Shareholders holding not less than **10%** of the voting rights have the right to request an extraordinary general meeting[428](index=428&type=chunk) - Shareholders holding not less than **5%** of the total voting rights or not less than **100** shareholders may propose resolutions to be moved at an annual general meeting[429](index=429&type=chunk) - The company adopted a dividend policy, where dividend decisions consider various factors including financial performance, cash flow, capital requirements, and shareholder interests[434](index=434&type=chunk) [Risk Management and Internal Control](index=93&type=section&id=Risk%20Management%20and%20Internal%20Control) [Risk Management Framework and Process](index=93&type=section&id=Risk%20Management%20Framework%20and%20Process) The Group established a three-tier risk management framework with committees and a five-stage process to support strategic, operational, reporting, and compliance objectives - The risk management organizational structure is divided into **governance layer** (Board of Directors, Audit Committee, Risk Management Committee), **management layer** (Operating Management Committee, etc.), and **executive layer** (three lines of defense)[463](index=463&type=chunk)[464](index=464&type=chunk) - The risk management process includes: **risk identification**, **risk assessment**, **risk response**, **risk monitoring**, and **risk reporting**[465](index=465&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk) - Risk management assurance mechanisms include integrating internal controls into business processes, performance appraisals, and continuous communication and training[469](index=469&type=chunk)[473](index=473&type=chunk) [Key Risks Identified](index=98&type=section&id=Key%20Risks%20Identified) The Group identified and implemented measures for three high-level risks: legal, information technology and data security, and competition Key Risks and Mitigation Measures | Important Risk | Risk Description | Risk Response Measures | | :--- | :--- | :--- | | **Legal Risk** | Main business operates in a highly regulated environment; non-compliance or failure to adapt to policy changes may adversely affect business | Establish business process norms and internal controls, timely acquire and interpret policies, assess impact, and design response plans | | **Information Technology and Data Security Risk** | Product R&D failures, system malfunctions, or data breaches may significantly negatively impact brand reputation and business continuity | Establish standardized R&D processes, operations and maintenance management, and emergency plans, and comprehensively prevent data security risks from personnel, processes, and technology | | **Competition Risk** | Intense competition in the internet health sector; actions by major competitors and new entrants may pose threats | Closely monitor the competitive landscape, conduct in-depth analysis, and create core competitive advantages through business innovation and diversified management | [Independent Auditor's Report](index=102&type=section&id=Independent%20Auditor%27s%20Report) [Audit Opinion and Key Audit Matters](index=102&type=section&id=Independent%20Auditor%27s%20Report-Summary) Ernst & Young issued an unqualified audit opinion on the Group's FY2025 financial statements, highlighting key audit matters including investment impairment and fair value measurement - Auditor Ernst & Young issued an **unqualified audit opinion**, stating that the financial statements were prepared fairly in accordance with Hong Kong Financial Reporting Standards[493](index=493&type=chunk) - Key Audit Matters include: **Impairment of investments in associates**, **Fair value measurement of unlisted equity investments classified as financial assets at fair value through profit or loss**, and **Goodwill impairment**[495](index=495&type=chunk)[499](index=499&type=chunk)[503](index=503&type=chunk)[507](index=507&type=chunk) - For key audit matters, the auditor performed procedures including evaluating the competence of independent valuers, reviewing valuation methodologies, and assessing the reasonableness of management's assumptions[500](index=500&type=chunk)[506](index=506&type=chunk)[510](index=510&type=chunk) [Financial Statements](index=109&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss](index=109&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended March 31, 2025, the Group reported 30.60 billion yuan in revenue, 7.43 billion yuan in gross profit, and 1.43 billion yuan in net profit Consolidated Statement of Profit or Loss (For the Year Ended March 31, RMB '000) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | **Revenue** | **30,598,292** | 27,026,555 | | **Gross Profit** | **7,432,091** | 5,895,321 | | **Profit Before Tax** | **1,559,968** | 939,399 | | **Profit for the Year** | **1,432,014** | 883,136 | | **Profit Attributable to Owners of the Parent** | **1,432,427** | 883,477 | | **Basic Earnings Per Share** | **RMB 8.91 cents** | RMB 6.29 cents | [Consolidated Statement of Financial Position](index=111&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's total assets were 21.18 billion yuan, with net assets increasing to 16.31 billion yuan Consolidated Statement of Financial Position (As of March 31, RMB '000) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | **Total Non-Current Assets** | **8,902,237** | 6,193,100 | | **Total Current Assets** | **12,276,180** | 13,512,237 | | **Total Assets** | **21,178,417** | 19,705,337 | | **Total Current Liabilities** | **4,742,172** | 5,025,458 | | **Total Non-Current Liabilities** | **123,085** | 162,275 | | **Total Liabilities** | **4,865,257** | 5,187,733 | | **Net Assets** | **16,313,160** | 14,517,604 | [Consolidated Statement of Cash Flows](index=115&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended March 31, 2025, operating activities generated 1.40 billion yuan in cash, while investing activities used 2.60 billion yuan Consolidated Statement of Cash Flows (For the Year Ended March 31, RMB '000) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | **Net Cash Flows from Operating Activities** | **1,395,033** | 1,079,832 | | **Net Cash Flows Used in Investing Activities** | **(2,596,482)** | (4,880,900) | | **Net Cash Flows Used in Financing Activities** | **(72,517)** | (1,982,395) | | **Net Decrease in Cash and Cash Equivalents** | **(1,273,966)** | (5,783,463) | | **Cash and Cash Equivalents at Year-End** | **2,218,296** | 3,490,169 | [Financial Summary](index=218&type=section&id=Financial%20Summary) [Five-Year Financial Summary](index=218&type=section&id=Financial%20Summary-Summary) This section presents the Group's five-year financial summary, showing steady revenue growth, a return to profitability, and increasing assets Five-Year Financial Summary (For the Year Ended March 31, RMB '000) | Item | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Performance** | | | | | | | Revenue | **30,598,292** | 27,026,555 | 26,763,016 | 20,577,616 | 15,518,468 | | Profit/(Loss) Before Tax | **1,559,968** | 939,399 | 550,994 | (252,514) | 401,219 | | Profit/(Loss) for the Year | **1,432,014** | 883,136 | 536,509 | (268,041) | 342,444 | | **Assets and Liabilities** | | | | | | | Total Assets | **21,178,417** | 19,705,337 | 20,747,820 | 19,201,997 | 17,739,495 | | Total Liabilities | **(4,865,257)** | (5,187,733) | (5,600,621) | (5,132,145) | (3,458,171) | | Equity Attributable to Owners of the Parent | **16,312,179** | 14,544,212 | 15,173,573 | 14,096,039 | 14,301,670 |

Market Performance - As of July 10, 2025, the CSI Hong Kong Internet Index (931637) decreased by 0.06%, with mixed performance among constituent stocks [3] - Leading gainers included Beike-W (02423) up 5.71%, China Ruoyi (00136) up 4.67%, and Lion Group (02562) up 4.34%, while leading decliners were Kingsoft (03888) down 2.65%, Yimaitong (02192) down 2.30%, and Reading Group (00772) down 1.96% [3] - The Hong Kong Internet ETF (159568) showed a recent price of 1.69 yuan, with a 14.51% increase over the past three months [3] Liquidity and Trading Activity - The Hong Kong Internet ETF had a turnover rate of 21.07% during the trading session, with a transaction volume of 68.0941 million yuan, indicating active market trading [3] - The average daily trading volume for the Hong Kong Internet ETF over the past year was 175 million yuan [3] Fund Performance and Metrics - As of July 9, 2025, the Hong Kong Internet ETF had a net value increase of 51.68% over the past year, ranking 184 out of 2907 index equity funds, placing it in the top 6.33% [4] - The fund achieved a maximum monthly return of 30.31% since inception, with the longest consecutive monthly gain being three months and a maximum cumulative gain of 24.85% [4] - The fund's historical holding period of one year has a 100% probability of profit [4] Risk and Fee Structure - The Hong Kong Internet ETF has a Sharpe ratio of 1.49 since inception, with a relative drawdown of 4.64% as of July 9, 2025 [5] - The management fee is 0.50% and the custody fee is 0.10%, which are among the lowest in comparable funds [5] - The tracking error for the Hong Kong Internet ETF over the past three months was 0.052%, indicating the highest tracking precision among comparable funds [5] Valuation Metrics - The latest price-to-earnings ratio (PE-TTM) for the CSI Hong Kong Internet Index is 21.74, which is in the 10.57th percentile over the past year, indicating a valuation lower than 89.43% of the time in the past year [5] - The index consists of 30 listed companies involved in internet-related businesses, reflecting the overall performance of internet-themed stocks within the Hong Kong Stock Connect [5][6] Top Holdings - As of June 30, 2025, the top ten weighted stocks in the CSI Hong Kong Internet Index included Xiaomi Group-W (01810), Tencent Holdings (00700), Alibaba-W (09988), Meituan-W (03690), and Kingsoft (03888), collectively accounting for 72.11% of the index [6]

Core Viewpoint - The article discusses the implications of Alibaba's recent issuance of zero-coupon convertible bonds, highlighting both the short-term costs and long-term benefits for the company and its subsidiaries, particularly Alibaba Health. Group 1: Financing and Capital Structure - Alibaba has completed a private placement of zero-coupon convertible bonds totaling HKD 120.23 billion, maturing in 2032, which will not bear interest and are unsecured [2] - The net proceeds from the bond issuance are estimated to be approximately HKD 119 billion, intended for general corporate purposes, including investments in cloud infrastructure and international business expansion [6] - The issuance is seen as a way to alleviate cash pressure while allowing Alibaba to maintain flexibility in its capital structure [6] Group 2: Market Reactions and Analyst Opinions - Analysts view the premium pricing of the bonds positively, noting that the lack of periodic interest payments saves Alibaba on interest expenses and reduces potential disputes with minority shareholders [3] - The bond's conversion price represents a 48% premium over the placement price of Alibaba Health shares, providing an investment opportunity for those optimistic about Alibaba Health's future [3] - However, the issuance of convertible bonds is rare and typically only feasible for large corporations, indicating Alibaba's strong market position [4] Group 3: Impact on Alibaba Health - The use of Alibaba Health shares as the conversion target reflects a consolidation of resources within the Alibaba Group, with expectations of further integration across its business segments [11] - Alibaba Health reported a revenue of approximately RMB 30.598 billion for the fiscal year ending March 31, 2025, marking a 13.2% year-on-year increase, with adjusted net profit rising by 35.6% [11] - Despite the growth, analysts caution that the increased competition and marketing expenses may pressure Alibaba Health's profitability in the near term, making the bond issuance a double-edged sword [11][13]

Financing Plan - Alibaba recently announced a financing plan to issue zero-coupon exchangeable bonds totaling approximately HKD 12 billion, maturing in 2032, to support cloud infrastructure and international business development [3][4] - The company plans to use the net proceeds from the bond issuance for general corporate purposes, including investments in cloud infrastructure and international business [4] Financial Performance - In the fiscal year 2025, Alibaba reported revenue growth of 6% to RMB 996.35 billion, with net profit increasing by 62.62% to RMB 1,301.09 billion, although growth rates have slowed compared to previous years [9][12] - The core business, Taobao Group, faced revenue stagnation, with growth rates of -3.89%, 5.25%, and 3.43% over the last three years [10][12] - International digital commerce showed strong performance with a revenue increase of 29% to RMB 1,323 billion, but it remains unprofitable with an adjusted EBITA loss of RMB 151.37 billion [14][16] Debt and Cash Flow - Alibaba's debt-to-asset ratio has been on the rise, reaching 39.58% in the fiscal year 2025, while cash and cash equivalents decreased to RMB 145.49 billion [8] - Operating cash flow has also declined over the past three years, from RMB 1,977.52 billion to RMB 1,635.09 billion [8] Management Changes - Significant changes in Alibaba's partnership structure occurred, with nine partners, including Zhang Yong and Dai Shan, exiting their roles, while Jiang Fan was promoted to CEO of Alibaba's e-commerce division [18][20] - The total number of partners decreased from 26 to 17, indicating a shift in management dynamics [18][20] Strategic Initiatives - To combat stagnation, Alibaba announced a plan to provide RMB 50 billion in direct subsidies to consumers and merchants over the next 12 months, aiming to boost sales and market competitiveness [23]

Core Viewpoint - The Hong Kong internet sector is experiencing a competitive landscape, highlighted by a significant promotional battle between Alibaba's Ele.me and Meituan, indicating aggressive market share acquisition strategies [3][4]. Group 1: Market Performance - As of July 7, 2025, the CSI Hong Kong Internet Index (931637) decreased by 0.46%, with mixed performance among constituent stocks [3]. - Notable gainers included Zhong An Online (06060) up 5.52%, Ping An Good Doctor (01833) up 3.23%, and Dongfang Zhenxuan (01797) up 3.11% [3]. - Conversely, Kingdee International (00268) led the declines at 4.29%, followed by Kingsoft (03888) down 4.06% and Yimaitong (02192) down 2.92% [3]. - The Hong Kong Internet ETF (159568) saw a slight increase of 0.06%, closing at 1.67 yuan, with a 1.21% rise over the past two weeks [3]. Group 2: Liquidity and Trading Activity - The Hong Kong Internet ETF recorded a turnover of 20.01% during the trading session, with a transaction volume of 63.6452 million yuan, indicating active market participation [3]. - Over the past year, the ETF has averaged daily trading volume of 174 million yuan [3]. Group 3: Industry Trends and Investment Outlook - According to CICC, the internet sector has entered a new investment cycle since 2025, with AI, overseas expansion, and instant retail emerging as key focus areas [4]. - The Hong Kong Internet ETF has shown a net value increase of 47.93% over the past year, ranking 218 out of 2897 index funds, placing it in the top 7.53% [4]. - The ETF's highest monthly return since inception was 30.31%, with a historical one-year holding profitability rate of 100% [4]. Group 4: Valuation and Tracking Accuracy - The latest price-to-earnings ratio (PE-TTM) for the CSI Hong Kong Internet Index is 21.75, indicating a valuation below 89.06% of the past year, suggesting historical low valuation levels [5]. - The ETF has the highest tracking accuracy among comparable funds, with a tracking error of 0.052% over the past three months [5]. - The top ten weighted stocks in the index account for 72.11% of the total, including major players like Xiaomi Group-W (01810), Tencent Holdings (00700), and Alibaba-W (09988) [5].

Core Viewpoint - Alibaba plans to invest 380 billion yuan in AI infrastructure and is utilizing innovative financing tools to support this strategic investment [1][11]. Group 1: Financing Strategy - Alibaba announced the issuance of zero-coupon exchangeable bonds totaling approximately 12 billion HKD, maturing in 2032, with Alibaba Health shares as the underlying asset [1][2]. - This financing method is a low-cost option anchored to the value of Alibaba Health's equity, reflecting institutional investors' optimism about its future stock price [1][3]. - The initial exchange ratio for the bonds is set at approximately 160,500 shares of Alibaba Health for every 1 million HKD of bonds, with an initial exchange price of 6.23 HKD per share, which is 37.83% higher than the closing price on the announcement day [6]. Group 2: Market Context - Since September 24 of the previous year, Hong Kong stocks have performed well, with the Hang Seng Tech Index rising over 40% [1]. - Alibaba Health's stock price has also increased by 40% year-to-date, contributing to a lower financing cost for Alibaba [3][4]. Group 3: Strategic Focus - The financing will enhance Alibaba's focus on its core strategies in e-commerce and AI, with significant investments planned for international market expansion and AI infrastructure [8][11]. - Alibaba's financial health remains strong, with a net cash position of 366.4 billion yuan as of March 31, 2025, and a low debt ratio compared to peers in the Chinese internet sector [9][11]. Group 4: Future Outlook - The funds raised will be directed towards cloud computing infrastructure and international e-commerce development, with AI seen as a long-term growth engine [11]. - Alibaba's international e-commerce business is currently in an expansion phase but has not yet achieved profitability, with an adjusted EBITA loss of 15.137 billion yuan for the fiscal year 2025 [11].

Group 1 - Guangzhou's Huangpu District has launched a series of policies to support the development of artificial intelligence and robotics, with funding up to 10 million yuan, driven by the urgent need for economic transformation as GDP growth lags behind national and provincial averages [1] - The international study published in Nature indicates that fine particulate matter pollution is linked to increased mutations in cancer-related genes among non-smokers, raising lung cancer risks more significantly than secondhand smoke [2] - The Xiaomi Life car-mounted tissue box, originally priced at 169 yuan, has sparked discussions online after being sold for 350 yuan, with the CEO acknowledging the high production costs due to complex materials and manufacturing processes [3] Group 2 - The upcoming opening of the LEGO theme park in Shanghai has led to a significant increase in hotel and homestay bookings, with hotel reservations up 3.5 times and homestay bookings up 6 times year-on-year [4] - The China Aerospace Science and Technology Corporation has announced that the first FLASH radiotherapy robot in the country has entered the clinical trial phase, with trials being conducted at several major hospitals [5] - Dong Mingzhu is nominated for the National Science and Technology Progress Award for her work on key technologies and industrialization of efficient heat pump air conditioners for extreme environments [6] Group 3 - WeChat has introduced an optimized chat record backup feature that allows users to back up their chat records to external storage devices, with an automatic backup option available [7] - There is a growing trend of young consumers engaging in large-scale borrowing, leading to potential debt issues, prompting the China Consumers Association to advise caution and responsible consumption [8] - Xiaomi's YU7 model has faced accusations of configuration changes, with customer service attributing the discrepancies to a documentation error [9] Group 4 - Apple's iPhone sales in China have seen an 8% year-on-year increase in Q2, marking the first growth in two years, attributed to discounts and improved trade-in values [10][11] - Chinese scientists have developed a new ultrafast electron source based on carbon nanotubes, achieving significant breakthroughs in electron beam energy concentration and pulse duration, laying the groundwork for advanced electron microscopy [11] - Alibaba plans to issue 12 billion HKD in zero-coupon convertible bonds, leveraging the strong performance of Alibaba Health's stock to reduce financing costs [12]