Guohai Securities·2024-08-18 10:38Investment Rating - The report maintains a "Buy" rating for Alibaba Group [6][25][56] Core Views - Alibaba is executing a strategy of integrating cloud and AI development, with AI contributing to revenue growth. The cloud revenue for Q2 2024 increased by 6% year-on-year to 26.5 billion RMB, with public cloud revenue showing double-digit growth [3][14][54] - The company is expected to recover double-digit growth in cloud revenue from external clients by the second half of FY2025, driven by product optimization and operational efficiency improvements [5][56] - The report anticipates revenue growth for FY2025 to FY2027 at 1,011.8 billion RMB, 1,122.8 billion RMB, and 1,237.8 billion RMB respectively, with adjusted net profits of 180.1 billion RMB, 215.2 billion RMB, and 245.2 billion RMB [6][56] Summary by Sections Financial Performance - For Q2 2024, Alibaba reported revenue of 243.2 billion RMB, a year-on-year increase of 4% and a quarter-on-quarter increase of 10%. Operating profit was 36 billion RMB, with a net profit of 24 billion RMB [10][32] - The adjusted EBITA for Q2 2024 was 45 billion RMB, showing a slight decrease of 1% year-on-year, but exceeding Bloomberg's consensus estimate [10][23] Business Segments - The Taobao Group's revenue for Q2 2024 was 113.4 billion RMB, a year-on-year decrease of 1%. The online GMV showed a high single-digit year-on-year growth, driven by an increase in the number of buyers and purchase frequency [26][49] - The International Digital Commerce Group achieved a revenue of 29.3 billion RMB, a year-on-year increase of 32%, primarily driven by strong growth in cross-border business [11][78] - The Cloud Intelligence Group's revenue reached 26.5 billion RMB, with AI-related revenue growing by triple digits year-on-year [14][54] Profitability and Valuation - The report projects a Non-GAAP P/E ratio of 9, 7, and 6 for FY2025, FY2026, and FY2027 respectively, with a target market value of 2,066.5 billion RMB for FY2025, corresponding to a target price of 116 HKD per share [6][56] - The adjusted EBITA for the Cloud Intelligence Group increased by 155% year-on-year to 2.3 billion RMB, attributed to improved operational efficiency [5][54]