BABA(HK:09988) KAIYUAN SECURITIES·2024-11-18 15:05Investment Rating - The investment rating for Alibaba-SW (09988.HK) is maintained at "Buy" [2][7]. Core Insights - The report indicates that Alibaba's FY2025 Q2 performance met expectations, with a focus on the competitive landscape in the e-commerce sector. The monetization rate for Taotian has stabilized, and non-e-commerce businesses continue to improve, leading to a slight upward revision of the FY2025 adjusted net profit forecast to 151.7 billion yuan [7][8]. - The report anticipates that the domestic e-commerce market share will stabilize, with a potential rebound in monetization rates and continued strong growth in international e-commerce and improvements in Alibaba Cloud profitability [7][8]. Summary by Sections Financial Performance - FY2025 Q2 revenue grew by 5% year-on-year, while non-GAAP net profit declined by 9%, aligning with Bloomberg consensus expectations. Taotian's customer management revenue increased by 2% year-on-year, with a stable monetization rate [8]. - The International Business Group saw a 29% year-on-year revenue increase, while the Cloud Intelligence Group's revenue grew by 7%, with public cloud product revenue experiencing double-digit year-on-year growth [8]. Profitability Forecast - The adjusted net profit forecast for FY2025 is set at 151.7 billion yuan, with projections for FY2026 and FY2027 at 170.7 billion yuan and 189.1 billion yuan, respectively. Corresponding year-on-year growth rates are expected to be -3.7%, 12.5%, and 10.8% [7][11]. - The report highlights that the diluted EPS for FY2025 is projected at 8.1 yuan, with P/E ratios of 9.8, 8.5, and 7.5 for FY2025, FY2026, and FY2027, respectively [11]. Market Dynamics - The report notes that Taotian will continue to invest in user experience to capture market share, with potential fluctuations in profit margins. The number of 88VIP members reached 46 million, supported by low-price subsidies and partnerships with Tencent [9]. - A share buyback program valued at 14.7 billion USD was executed in 2024, representing approximately 6.9% of the market value at that time, with an additional buyback capacity of 22 billion USD remaining [9].