Guoxin Securities·2024-11-17 12:36Investment Rating - The report maintains an "Outperform" rating for Alibaba Group [6][24]. Core Insights - The company achieved a revenue of 236.5 billion CNY in Q2 FY2025, representing a year-on-year growth of 5%. The growth was primarily driven by the International Digital Commerce Group, Cloud Business, Local Life Group, and Cainiao Group, while the Taobao Group and Digital Entertainment showed relatively flat growth [2][9]. - Non-GAAP net profit for the quarter was 36.5 billion CNY, a decrease of 9% year-on-year, with a Non-GAAP net profit margin of 15% [2][9]. - The company repurchased 4.1 billion USD worth of shares, reducing the net number of circulating shares by 2.1% [2][9]. Summary by Sections Taobao Group - Revenue grew by 1% year-on-year to 99 billion CNY, with retail customer management revenue up by 2% and wholesale business up by 18%. The adjusted EBITA margin decreased by 3.2 percentage points to 45% [2][18]. - The number of 88VIP members exceeded 47 million, increasing by 5 million from the previous quarter [2][18]. Cloud Computing - Cloud business revenue increased by 7% year-on-year to 29.6 billion CNY, with an adjusted EBITA margin rising from 5% to 9%. AI-related revenue has seen triple-digit growth for five consecutive quarters [3][20]. Financial Forecasts - Revenue forecasts for FY2025-FY2027 have been adjusted to 992 billion CNY, 1,088.6 billion CNY, and 1,193.1 billion CNY, reflecting a slight downward adjustment of -0.5%, -0.3%, and -0.5% respectively [4][24]. - Adjusted net profit forecasts for FY2025-FY2027 are set at 148.9 billion CNY, 163.2 billion CNY, and 185.5 billion CNY, with adjustments of -0.2%, -5.0%, and 1.8% respectively [4][24]. Valuation - The target price is maintained at 120-127 HKD, indicating an upside potential of 38%-46% from the current price [4][24].