The leader of e-commerce and the steady development of the Internet leader: BABA is a forerunner in the field of domestic e-commerce and has rapidly expanded his business with the help of his advantages in the field of e-commerce. It has become a large Internet company integrating e-commerce, logistics, cloud computing, digital media and entertainment. 1HFY2022 and BABA realized operating income of 406.43 billion yuan, an increase of 31.61% over the same period last year, of which the business segment earned 351.41 billion yuan, accounting for 86.5% of the total income.
Retail business continues to take the lead, e-commerce live first: BABA is the domestic e-commerce leader, FY2021 BABA e-commerce platform GMV is 7.494 trillion yuan, while in 2020, the total GMV of JD.com and Pinduoduo is 4.2801 trillion yuan, BABA GMV has obvious advantages. In the field of live e-commerce, Taobao Live benefited from the user traffic support of BABA platform and the sound supply chain foundation. FY2021 Taobao Live GMV exceeded 500 billion yuan. Five of the top 10 live broadcast anchors in 2020 were owned by Taobao Live, including two leading anchors Li Jiaqi and Weiya.
Add new retail and build a multi-dimensional distribution product matrix: in April 2021, BABA integrated his resources to set up a MMC business group (later renamed TCC) to increase investment in community group buying business. The new retail business focuses on online and offline integration, and provides users with multi-time dimensions such as "hour arrival" / "next day arrival" and multi-form product matrix such as distribution / pick-up through community group buying, box horse and big run fat and other offline merchants, enriching users' consumption choices.
Turning losses into profits, the cloud computing business has a broad prospect: the cloud computing business continues to make money from 3QFY2021 and accounts for 9% of the total revenue in 1HFY2022. Aliyun has grown into the top cloud computing service provider at home and abroad, ranking third with 9.52% of the international public cloud IaaS market in 2020, and 35.6% of the domestic public cloud IaaS market in 2020, ranking first and much higher than the second 13.3%. In 2020, China's cloud computing penetration rate is 4.3%, which is still a big gap compared with the global level of 7.9%. Combined with the country's 14th five-year Plan to focus on cloud computing, Aliyun, as the leader in the cloud computing market, is expected to enter a stage of rapid development. contribute a new increase in income for BABA.
Earnings forecast, valuation and rating: BABA still maintains a solid leading position in e-commerce business, and new businesses such as cloud computing are developing well, which is expected to bring new increments for the company. We predict that the net return of BABA FY2022-FY2024 GAAP is 1226Universe 1581celestial 191.6 billion yuan, corresponding to the EPS is 5.65Universe 7.29Universe 8.83yuan. Combined with the valuation of SOTP and DCF, the reasonable market capitalization of the company is 2.6765 trillion RMB, corresponding to the value of HK $150.0 per share, which is rated as "overweight".
Risk hint: regulatory anti-monopoly and data privacy-related policies affect BABA's business development, new business development is not as expected, competition intensifies.