Zhitong Financial APP learned that Guoxin Securities issued a research report saying that it maintained BABA-SW's (09988) "overweight" rating, reduced its cost and efficiency plan, and slightly raised its profit forecast to reflect the narrowing of losses in businesses such as Taotong, Box Horse and ele.me, valuing it in a range of HK $145,157 according to the segment valuation method. The company's core e-commerce platform business is currently under pressure from the impact on its core category, and the bank estimates that FY2023Q1 e-commerce business growth reached a low level this year under the epidemic and will improve in the second half of the year.

The main points of Guoxin Securities are as follows:

Overall performance: the income was basically the same as the same period last year, and the profit of local life improved significantly.

FY2023Q1 achieved operating income of 205.6 billion yuan, down 0.1% from the same period last year. The low revenue growth is mainly due to the negative growth of customer management income from Tmall and Taobao affected by the epidemic. FY2023Q1's Non-GAAP net profit was 30.3 billion yuan, a decrease of 30% compared with the same period last year. The net interest rate was 15%. The negative profit growth was due to the negative growth of customer management income and the loss of investment income calculated by equity method. Under the efforts of the management to reduce costs and increase efficiency, losses have been reduced in many sectors of the business this quarter. The economic model of ele.me unit turned positive in the quarter, and the quarterly loss of the local life plate was reduced by 1.9 billion yuan. FY2023Q1 BABA bought back ADR for about $3.5 billion. There is still a quota of $12 billion available for the $25 billion buyback program.

E-commerce: the growth rate of customer management income is the lowest this year and is expected to improve in the second half of the year.

The core business income of FY2023Q1 was 180.2 billion yuan, down 0.4% from the same period last year, of which the customer management income reflecting the performance of Taobao and Tmall was 72.3 billion yuan, down 10.1% from the same period last year. Taobao and Tmall GMV achieved negative unit growth this quarter, mainly due to the disruption of the supply chain and logistics caused by the epidemic in April and May, and began to recover slowly in June. Tmall achieved positive year-on-year growth in payment GMV. The bank expects customer management revenue to grow at a low rate for the year and will improve in the second half of the year.

Cloud business: poor demand and low revenue growth.

FY2023Q1 cloud business revenue totaled 17.7 billion yuan, up 10.2% from the same period last year, slightly lower than the 12.5% growth rate in the previous quarter. On the profit side, the adjusted EBITA profit margin of the cloud business remained at 1.4% in the current quarter and continued to be profitable. Cloud business continued to face weak demand in the Internet and education sectors during the quarter, while the financial, telecommunications and public service sectors recovered somewhat. Non-Internet industries accounted for 53% of revenue, up 5% from the same period last year.