Tianfeng Securities·2024-08-23 14:11Investment Rating - The report maintains a "Buy" rating for the company with a target price indicating an expected return of over 20% within the next six months [15][24]. Core Insights - The company reported a revenue of 2,432 billion yuan for FY25Q1, reflecting a year-on-year increase of 4%, which was below Bloomberg consensus expectations by 2.7% [15]. - Adjusted EBITA for the same period was 450 billion yuan, showing a slight decrease of 1% year-on-year, but exceeded Bloomberg's expectations by 5.8% [15]. - The company has been actively repurchasing shares, with a total expenditure of 5.8 billion USD for 613 million shares, contributing to a reduction in the number of outstanding shares [15]. - The cloud business showed promising growth with a revenue of 265 billion yuan, up 6% year-on-year, driven by double-digit growth in public cloud services and increased adoption of AI-related products [16]. - The report highlights the successful performance of the Taobao and Tmall group, which generated 1,134 billion yuan in revenue, although it was 3.6% below Bloomberg's consensus [22]. Summary by Sections Financial Performance - The company achieved an operating profit of 360 billion yuan for FY25Q1, which is a 15% decrease year-on-year but surpassed Bloomberg's expectations by 9% [15]. - The adjusted net profit was reported at 407 billion yuan, down 9% year-on-year, yet exceeded expectations by 4% [15]. Business Segments - Taobao and Tmall group revenue was 1,134 billion yuan, with retail revenue of 1,074 billion yuan, including customer management revenue of 801 billion yuan and direct sales revenue of 273 billion yuan [22]. - The cloud segment's adjusted EBITA was 23 billion yuan, indicating a strong performance compared to expectations [22]. - Local life services generated 162 billion yuan in revenue, with a significant reduction in losses due to improved operational efficiency [17]. Market Developments - The company is set to complete its dual primary listing on August 28, which is expected to enhance liquidity and facilitate inclusion in the "Hong Kong Stock Connect" [7]. - The report anticipates that the company's revenue for FY 2025-2027 will be 10,110 billion yuan, 11,097 billion yuan, and 12,122 billion yuan respectively, reflecting a focus on improving operational and investment efficiency [17].