BABA(BABA) 申万宏源·2024-08-11 09:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of $116 per share, representing a 45% upside potential [116] Core Views - The company is focusing on its core businesses, including Taotian Group, AIDC, and cloud computing, to drive growth and enhance user experience [116] - Taotian Group, as the core asset of the company, is undergoing a comprehensive upgrade in user experience, with a focus on GMV-driven traffic allocation and the introduction of small and medium-sized merchants to improve platform ecosystem [116][8] - The company is accelerating its overseas business, with international retail revenue reaching 81.7 billion yuan in FY2024, a 60% YoY increase, driven by the full-chain cross-border channel and the semi-hosted model [116][31] - The cloud business is a key growth driver, with FY2024 revenue of 106.4 billion yuan, a 3% YoY increase, and a focus on public cloud and AI-driven growth [116][67] Taotian Group - The company has repurchased 1.249 billion shares, totaling $12.5 billion, reducing the number of outstanding shares by 5.1% [1] - In FY2024, the company paid a regular cash dividend of $0.125 per share and a special cash dividend of $0.0825 per share, totaling approximately $4 billion [1] - The company plans to complete the conversion to a dual primary listing in Hong Kong by August 2024 [1] - The company increased its share repurchase program by $25 billion, with a total repurchase quota of $35.3 billion over the next three years [1] - In Q2 2024, the company repurchased 613 million shares for $5.8 billion, a $1 billion increase from the previous quarter, with $26.1 billion remaining in the repurchase quota as of March 2027 [1] E-commerce Industry - The penetration rate of online retail sales of physical goods reached 27.6% in 2023, with significant growth potential in categories such as personal accessories, food, and beverages, which have low online penetration rates [6] - The company has adjusted its traffic allocation strategy to prioritize GMV, moving away from a focus on low prices and order volume, and instead emphasizing brand and service quality [8] - The company has introduced AI tools like "Taobao Ask" to improve product matching and conversion rates, leveraging AI to enhance user experience and operational efficiency [24][25] International Business - The company's international retail business achieved revenue of 81.7 billion yuan in FY2024, a 60% YoY increase, driven by the full-chain cross-border channel and the semi-hosted model [31] - Trendyol, one of the company's international platforms, saw order growth of 68%, 47%, and over 20% in FY2022, FY2023, and FY2024, respectively, with GMV growth of 80% and 110% in FY2022 and FY2023 [35] - The company's international wholesale business achieved revenue of 20.9 billion yuan in FY2024, a 7% YoY increase [31] Cloud Business - The company's cloud business achieved revenue of 106.4 billion yuan in FY2024, a 3% YoY increase, with AI-related revenue growing at a triple-digit rate [67] - The company has reduced prices for core cloud products, with an average price reduction of 23% and a maximum reduction of 59% in April 2024 [70] - The company plans to increase AI computing power, which is expected to drive growth in public cloud services [73] Financial Projections - The company is expected to achieve revenue of 1,037.8 billion yuan, 1,104.3 billion yuan, and 1,180.4 billion yuan in FY2025, FY2026, and FY2027, respectively, representing YoY growth of 10.3%, 6.4%, and 6.9% [116] - Non-GAAP net profit is expected to reach 157 billion yuan, 170.6 billion yuan, and 183.8 billion yuan in FY2025, FY2026, and FY2027, respectively, representing YoY growth of -0.9%, 8.7%, and 7.7% [116]