BABA(09988) 国信证券·2024-08-18 10:13Investment Rating - The investment rating for the company is "Outperform the Market" [2][25][39]. Core Insights - The company has shown stable revenue growth, with a 4% year-on-year increase in revenue for Q1 FY2025, reaching 243.2 billion yuan. The international digital commerce group, local life group, and Cainiao group significantly contributed to this growth, while Taobao, cloud business, and entertainment segments experienced flat growth [1][29]. - The company expects to complete its dual primary listing on the Hong Kong Stock Exchange by the end of August 2024, with trading expected to commence on September 9, 2024 [1][32]. - The company is focusing on core business investments, anticipating that non-core loss-making segments will gradually turn profitable over the next 1-2 years [6][18]. Financial Performance - For Q1 FY2025, the company's Non-GAAP net profit was 41.2 billion yuan, a decrease of 8% year-on-year, with a Non-GAAP net profit margin of 17%. Adjusted EBITA decreased by 1% to 45 billion yuan, with an adjusted EBITA margin down by 0.9 percentage points [1][6]. - The company plans to continue investing in user experience and technology infrastructure, particularly in the Taobao group, which saw a revenue decline of 1% to 113.4 billion yuan in the same quarter [1][14]. - The cloud computing segment reported a 6% year-on-year revenue increase to 26.5 billion yuan, with adjusted EBITA margins improving from 2% to 9% due to strong demand for AI products and solutions [3][48]. Revenue Forecast and Financial Metrics - The company has adjusted its revenue forecasts for FY2025 to FY2027 to 999.3 billion, 1,094.1 billion, and 1,201.8 billion yuan, respectively, reflecting a slight downward adjustment of -1.8%, -1.5%, and -0.7% [18][25]. - The adjusted net profit forecasts for FY2025 to FY2027 are set at 147.1 billion, 172.1 billion, and 182.6 billion yuan, with adjustments of 0.6%, 4.9%, and 1.7% [18][25]. - The company is currently trading at a PE ratio of 9 times for FY2025, with a target price range of 95-103 HKD, indicating an upside potential of 19%-29% from the current price [18][26].