The Zhitong Finance App learned that Dongwu Securities released a research report stating that considering Alibaba-SW (09988) business growth, competitive advantages and barriers, and maintaining a “buy” rating, the profit forecast for EPS (non-GAAP) for the 2024/2025/2026 fiscal year was lowered from 8.40/9.02/9.74 yuan to 7.51/8.03/8.85 yuan based on the company's revenue and profit slightly lower than expected. The company continues to optimize the profitability of various businesses, and the bank believes that subsequent large-scale investment will help to deepen the moat.

The main views of Dongwu Securities are as follows:

Revenue and profit were basically in line with expectations, and the year-on-year profit growth rate declined:

FY2024Q3 achieved revenue of 26.348 billion yuan, an increase of 5% over the previous year, and the agency agreed that it was 261,247 billion yuan. After deducting the impact of non-GAAP net profit, the company's non-GAAP net profit was $47.951 billion, down 4% year on year. The agency's agreed forecast was $47.946 billion, and revenue and profit were basically in line with expectations.

Taotian's profit margin remained high and stable, and the local life loss rate narrowed year-on-year:

FY2024Q3 Taotian/International Digital Commerce/Local Life/Cainiao/Ali)) Cloud Intelligence/Big Entertainment's six major groups and other businesses, eBitaMargin, were 46.43%/-11.03%/-13.64%/3.37%/8.42%/-10.26%/-6.75%, respectively. Local lifestyle eBITA loss rate narrowed to -13.64% +8.18pct year over year

Taotian GMV is growing healthily, increasing investment and regaining its leading position in the high market:

FY24Q3 Taotian Online GMV grew healthily year-on-year, and customer management revenue was basically the same as the same period, benefiting from strong growth in the number of transaction buyers and orders. The number of merchants on the platform continued to achieve double-digit year-on-year growth in the current quarter. The number of 88VIP members exceeded 32 million, continuing to achieve year-on-year double-digit growth.

Under business adjustments, multiple groups operate steadily and firmly adhere to the two strategic cores of e-commerce and AI:

FY24Q3 international digital commercial revenue exceeded expectations, and Choice led to rapid growth in cross-border business order volume. Losses in the local lifestyle business continued to narrow, and Cainiao expanded global coverage for 5 days. The increase in revenue from Alibaba Cloud's public cloud products and services will drive profitability optimization. We expect organizational adjustments and AI empowerment to support steady growth and continue to strengthen its leading position in the industry.

The company increased the scale of repurchases, demonstrating the firm confidence in the company's development:

According to the company's financial report, in the 2023 natural year, a total of 897.9 million shares of common stock were repurchased at US$9.5 billion (equivalent to 112 million American Depositary Shares). The board of directors has approved an increase of 26 billion US dollars to the share repurchase program, which is valid until the end of March 2027. After the scale increase, there is still a share repurchase limit of US$35.3 billion over the next three fiscal years.

Risk warning: Alibaba's founder reduced his holdings, competition in the new retail business intensified, user retention rates fell short of expectations, regulatory risks such as e-commerce law and antitrust increased, and the head of Alibaba Cloud changed.