GOLDEN SUN SECURITIES·2025-02-24 00:45Investment Rating - The report maintains a "Buy" rating for Alibaba [3][6]. Core Views - Alibaba's total revenue for Q3 2025 (ending December 2024) reached 280.15 billion, a year-on-year increase of 8%. Non-GAAP net profit attributable to shareholders was 51.33 billion, up 7% year-on-year [1]. - The company is focusing on AI infrastructure and has committed to significant capital expenditures, with plans to invest over 1 trillion RMB in cloud and AI facilities over the next three years [2][3]. - The report forecasts Alibaba's revenue for fiscal years 2025-2027 to be 997.7 billion, 1,084.25 billion, and 1,187.65 billion respectively, with non-GAAP net profits projected at 162.19 billion, 173.92 billion, and 192.62 billion [3][11]. Summary by Sections Financial Performance - For Q3 2025, revenue by business line was as follows: Taobao/Tmall: 136.1 billion (+5%), International Commerce: 37.8 billion (+32%), Alibaba Cloud: 31.7 billion (+13%), Local Services: 17 billion (+12%), Cainiao: 28.2 billion (-1%), and Digital Entertainment: 5.4 billion (+8%) [1]. - The adjusted EBITA profit margins for each segment were 45%, -13%, 10%, -4%, 1%, and -6% respectively [1]. AI Strategy - Alibaba has launched new AI models, Qwen2.5-VL and Qwen2.5-Max, achieving leading results in benchmark tests. The company aims to establish itself as a key player in AI infrastructure [2][3]. - The company has seen over 290,000 enterprises and developers accessing its Qwen API, indicating strong demand for its AI capabilities [2]. Future Projections - The report estimates Alibaba's reasonable market value to exceed 3 trillion RMB, with target prices set at 169 HKD for the Hong Kong stock and 174 USD for the US stock [3]. - The projected earnings per share (EPS) for the upcoming years are 8.4, 9.1, and 10.0 RMB for fiscal years 2025, 2026, and 2027 respectively [5][11].