BABA(HK:09988) Soochow Securities·2025-02-26 04:43Investment Rating - The investment rating for Alibaba-W (09988.HK) is "Buy" (maintained) [1] Core Views - The company's revenue growth exceeded expectations, with a year-on-year increase of 8% in FY2025 Q3, reaching RMB 280.1 billion, surpassing Bloomberg's consensus estimate of RMB 277.37 billion. Non-GAAP net profit also rose by 7% year-on-year to RMB 51.1 billion, exceeding the expected RMB 46.13 billion [10][29] - The report highlights that the Taobao and Tmall business segment's revenue grew by 5% to RMB 1360.91 billion, driven by an increase in customer management revenue, which rose by 9% [14][29] - The report emphasizes the strategic focus on e-commerce and cloud computing, with AI-driven initiatives being a core strategy moving forward [18][29] Summary by Sections Revenue and Profitability - In FY2025 Q3, the company achieved total revenue of RMB 280.1 billion, a year-on-year increase of 8%, and a non-GAAP net profit of RMB 51.1 billion, also up 7% year-on-year [10][29] - The revenue breakdown for major business segments includes Taobao and Tmall at RMB 1361 billion (5% growth), international digital commerce at RMB 378 billion (32% growth), and cloud services at RMB 317 billion (13% growth) [14][29] Business Segment Performance - Taobao and Tmall's EBITA margin decreased by 1.55 percentage points to 44.88%, indicating increased investment in customer acquisition and technology services [14][29] - The international digital commerce segment saw a 32% revenue increase, primarily due to strong performance in cross-border business [19][29] - The local life business reported a 12% revenue increase, with losses narrowing significantly, while the logistics segment (Cainiao) experienced a slight revenue decline of 1% [21][29] Future Outlook and Valuation - The report maintains EPS forecasts for FY2025, FY2026, and FY2027 at RMB 8.14, RMB 8.82, and RMB 9.55, respectively, with corresponding PE ratios (Non-GAAP) of 15.8, 14.6, and 13.5 [29][32] - The company is expected to continue its share buyback and dividend distribution, supporting the "Buy" rating [29]