BABA(HK:09988) Guoxin Securities·2025-04-15 09:35Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][5][24]. Core Views - The company is expected to achieve a revenue growth of 7% year-on-year in 4QFY25, with an adjusted EBITA margin of 13%. The revenue growth rates for various segments are projected as follows: Taobao (5%), International Digital Commerce (27%), Cloud Intelligence Group (20%), Local Services (12%), Cainiao (1%), and Entertainment (7%) [4][6]. - The company continues to focus on its core e-commerce and AI & Cloud businesses while reducing costs in non-core areas. The cloud revenue is expected to grow sustainably driven by AI industry momentum [5][24]. Summary by Sections Financial Forecasts - For FY2025, the company’s revenue is adjusted to CNY 996.9 billion, with further projections of CNY 1,074.2 billion in FY2026 and CNY 1,156.6 billion in FY2027. The adjustments reflect a slight decrease due to competitive pressures affecting monetization rates [5][27]. - The adjusted net profit forecasts for FY2025, FY2026, and FY2027 are CNY 160.2 billion, CNY 172.5 billion, and CNY 188.3 billion respectively, with adjustments of 5.9%, 4.1%, and 1.2% [5][27]. Segment Performance - Taobao Group is expected to see a GMV growth of 4% year-on-year in 4QFY25, with a continued focus on maintaining market share and enhancing quality supply [10]. - The Cloud segment is projected to accelerate with a revenue growth of 20% year-on-year in 4QFY25, driven by increased demand following the introduction of Deepseek [14]. - The AI-driven applications are gaining traction, with the new Quark app achieving a monthly active user count of 149 million, marking it as the only domestic AI app to surpass 100 million MAU [21]. Profitability Metrics - The adjusted EBITA for 4QFY25 is expected to be CNY 302 billion, reflecting a year-on-year increase of 26% [6]. - The adjusted EBITA margin is projected to improve by 2 percentage points year-on-year, primarily due to the narrowing losses in non-Taobao businesses [6][10]. AI and Cloud Developments - The company has been actively iterating its AI models, with several new releases aimed at enhancing reasoning capabilities and multi-modal functionalities [17]. - The AI Cloud segment is expected to continue its robust growth trajectory, with significant contributions from AI-related revenues anticipated to reach triple-digit growth [14][21].