2024-10-12 01:40Investment Rating - The report maintains a "Buy" rating for Alibaba (BABA) [5][10] Core Views - The report emphasizes that the interconnected ecosystem opens up user growth potential for Taotian, while AI drives accelerated growth in cloud services [5][10] - The company is expected to continue its share buyback program to enhance shareholder returns [10] Financial Outlook - For FY2Q25, revenue is forecasted to reach RMB 242.8 billion, representing an 8.0% year-over-year growth, with adjusted EBITA of RMB 39.4 billion, a decrease of 6% year-over-year [5][7] - By business segment, expected year-over-year growth rates are +2.7% for Taotian, +29.8% for International Business Digital Commerce Group, +11.0% for Local Life Group, +20.0% for Cainiao Group, +7.0% for Cloud Intelligence Group, -1.0% for Great Entertainment Group, and +1.0% for other businesses [5][7] Business Segment Insights - Taotian is expected to sustain GMV growth, with the integration of WeChat Pay anticipated to attract new users and enhance commercialization [5][8] - The international business is projected to maintain strong growth, focusing on operational efficiency and expanding market presence [5][9] - The cloud intelligence segment is expected to benefit from increased AI investments, with new models being launched to improve accessibility for enterprises and developers [5][9] Shareholder Returns - The company repurchased 414 million common shares for USD 4.1 billion in Q3 2024, continuing a trend of significant buybacks [10] - The remaining share repurchase program has a budget of USD 22 billion, indicating ongoing commitment to enhancing shareholder value [10]