2024-07-21 12:31Investment Rating - The report maintains a "Buy" rating for Alibaba (BABA US) with a target price of $111, indicating a potential upside of 45% from the current price of $76.54 [1][7][8]. Core Insights - Alibaba's e-commerce GMV is expected to grow by 6% year-on-year, aligning with market performance, while CMR growth is anticipated at 3%, slower than GMV growth due to low monetization rates from new merchants [1][21]. - The company is focusing on enhancing product competitiveness and user experience, which is expected to yield positive results in GMV recovery and international business expansion [6][7][21]. - Revenue projections for the fiscal year ending March 31, 2025, are set at 1,035,048 million RMB, reflecting a year-on-year growth of 10% [2][6]. Financial Summary - Total revenue for FY2025 Q1 is projected at 251,013 million RMB, with a year-on-year increase of 7% [5][6]. - Net profit for FY2025 is forecasted to be 161,730 million RMB, with an EPS of 68.44 RMB, representing a 9.3% growth [2][5]. - The company’s P/E ratio is expected to decrease from 10.0 in FY2023 to 8.1 in FY2025, indicating improved valuation metrics [2][7]. Segment Performance - Taobao's revenue is expected to grow by 1% year-on-year, while international business is projected to see a 39% increase, driven by the success of the AliExpress Choice service [21]. - Cloud services are anticipated to recover with mid-single-digit growth, supported by public cloud and AI-related revenues [21]. - Local services are expected to grow by 14%, in line with industry trends, while Cainiao's revenue is projected to increase by 22% due to cross-border logistics [21].