Ge Long Hui·2025-11-21 04:00Core Insights - The company's Q3 2025 performance met expectations with revenue of 35.6 billion yuan, a 14% year-on-year increase, and a Non-IFRS net profit of 4.99 billion yuan, slightly above the forecast of 4.82 billion yuan [1][2] Revenue Growth - Q3 2025 advertising revenue accelerated with a 14% year-on-year increase, driven by technological improvements in full-site promotion and UAX, enhancing conversion efficiency [1] - Total GMV for Q3 2025 grew by 15% to 385 billion yuan, with over 32% of GMV coming from the general merchandise category, which outpaced the overall market growth [1] AI Strategy and Implementation - The AI strategy is progressing, with the multi-modal foundational model generating over 300 million yuan in revenue during Q3, a significant increase from previous quarters [2] - AI models have enhanced advertising and e-commerce operations, contributing to a 4-5% increase in domestic advertising revenue and a nearly 5% rise in search volume for e-commerce [2] Cost Management - The company demonstrated strong cost control in Q3 2025, with management expenses significantly lower than expected, primarily due to reduced SBC costs [2] - The sales expense ratio decreased by 4 percentage points to 29.3%, attributed to improved marketing efficiency [2] Profit Forecast and Valuation - The Non-IFRS net profit forecast for 2025 has been raised by 3% to 20.6 billion yuan, while the 2026 forecast was lowered by 7% to 22 billion yuan due to AI capital expenditure [3] - The current price corresponds to 12.5/11.5 times the Non-IFRS P/E for 2025/2026, with a target price of 89 HKD, indicating a potential upside of 40% [3]