BABA(09988) 申万宏源·2024-11-07 06:21Investment Rating - The report maintains a "Buy" rating for Alibaba Group, with a target valuation of 25,047 billion RMB, corresponding to a target price of 147 USD per ADS and 143 HKD per share, indicating an upside potential of 48% and 45% respectively [5][9][118]. Core Insights - The report emphasizes that the domestic internet cloud business has emerged from a low point, with AI and international expansion serving as new growth drivers. The shift in focus towards AI-driven public cloud services is expected to enhance revenue growth and profitability [6][7][12]. - Alibaba's cloud business is identified as a core strategic focus, with significant investments in AI capabilities and self-developed chips, which are anticipated to drive revenue growth in the coming years [10][11][12]. - The report highlights that AI applications are beginning to show tangible contributions to revenue, particularly in cloud services and advertising, with significant growth in AI-related product revenues [75][110]. Financial Data and Earnings Forecast - For FY2025 to FY2027, the projected revenues for Alibaba Group are 10,186 billion RMB, 10,934 billion RMB, and 11,843 billion RMB, with corresponding growth rates of 8.2%, 7.3%, and 8.3% respectively. Adjusted net profits are forecasted to be 1,570 billion RMB, 1,706 billion RMB, and 1,838 billion RMB, with growth rates of -0.9%, 8.7%, and 7.8% respectively [4][118][119]. - The adjusted EBITA margin is expected to improve, with forecasts of 7.5%, 7.8%, and 8.0% for FY2025 to FY2027 [118][121]. Key Assumptions - The report posits that Alibaba's self-developed chips and model capabilities will enhance the growth of its cloud business, with revenue growth rates for Alibaba Cloud projected at 7.5%, 10.0%, and 11.0% for FY2025 to FY2027 [10][118]. - The strategic focus on public cloud products is expected to lead to improved profit margins, as the company reduces low-margin integrated projects [7][10][110]. Market Comparison - The report notes that Alibaba's cloud business has maintained the largest market share in IaaS and PaaS, although it has seen a decline from over 40% to below 30% from 2019 to 2023, while competitors like Huawei have gained market share [63][66]. - The competitive landscape is evolving, with AI becoming a critical factor in cloud service growth, as seen in the performance of international peers like Microsoft and Amazon [39][112].