BABA(HK:09988) GOLDEN SUN SECURITIES·2024-11-20 00:26Investment Rating - The report maintains a "Buy" rating for Alibaba [4][6]. Core Views - Alibaba's revenue for the second quarter of fiscal year 2025 (ending September) was 236.5 billion yuan, representing a year-on-year growth of 5%. Key segments such as Taobao, International Commerce, Local Services, Cainiao, Cloud Intelligence, and Digital Entertainment generated revenues of 99 billion, 31.7 billion, 17.7 billion, 24.6 billion, 29.6 billion, and 5.7 billion yuan respectively, with growth rates of 1%, 29%, 14%, 8%, 7%, and -1.5% [2][3]. - The adjusted EBITA for the quarter was approximately 40.6 billion yuan, down 5% year-on-year, with an EBITA margin of about 17%. The adjusted EBITA margins for the segments were 45%, -9%, -2%, 0%, 9%, and -3% respectively [2][3]. - Non-GAAP net profit for the quarter was 36.4 billion yuan, a decline of 9% year-on-year [2]. Summary by Sections Taobao - Taobao is still in an investment phase, with customer management revenue growing by 2% year-on-year, primarily due to the increase in e-commerce GMV. The monetization rate is positively impacted by the penetration of the "full-site promotion" tool and the introduction of a 0.6% technical service fee starting in September [2][3]. Cloud Intelligence - Cloud revenue reached 29.6 billion yuan, growing by 7% year-on-year, with public cloud revenue showing double-digit growth. AI-related product revenue has seen triple-digit growth for five consecutive quarters. The adjusted EBITA margin for cloud services improved to 9.0% [3]. Financial Projections - Revenue projections for Alibaba for fiscal years 2025 to 2027 are estimated at 1,010.9 billion, 1,113.9 billion, and 1,214.4 billion yuan respectively, with non-GAAP net profits projected at 160 billion, 183 billion, and 206 billion yuan [4][5]. - The report anticipates a P/E ratio of 10x for core e-commerce, 3x for cloud computing, and 2x for digital entertainment and other businesses, leading to a target price of 114 HKD for the Hong Kong stock and 116 USD for the US stock [4].