Revenue and earnings were generally in line with expectations. With FY3Q2024, the company achieved operating revenue of 26.35 billion yuan (+5.1%), Bloomberg agreed to expect 261.25 billion yuan (+5.4%); achieved adjusted net profit of 47.95 billion yuan (-4.0%), and Bloomberg's agreed forecast was 47.95 billion yuan (-4.0%). The company's revenue and profit were basically in line with expectations.
Taotian Group: CMR was basically flat year over year, and profit margins remained stable. With FY3Q2024, Taotian Group achieved revenue of 129.1 billion yuan (+1.6%), and adjusted EBITA was 59.9 billion yuan (profit margin 46%, -0.2pct). 1) CMR: The company achieved CMR revenue of 92.1 billion yuan (+0.46%) in the current quarter. Online GMV grew healthily year-on-year, driven by strong growth in transaction buyers and order volume, partly offset by a decrease in average order amount; 2) The number of platform merchants grew by double digits year over year, maintaining a continuous double-digit growth trend for the past four quarters; 3) After the Double Eleven Shopping Festival, order volume increased by double digits in the second half of the quarter; 4) 88VIP members exceeded 32 million, continuing to achieve year-on-year double-digit growth.
Cloud Intelligence Group: Revenue from public cloud products and services has grown healthily, and profitability has increased significantly. With FY3Q2024, Cloud Intelligence Group achieved revenue of 28.1 billion yuan (+3%), and adjusted EBITA was 2.36 billion yuan (profit margin 8.4%, +3.8pct). The company continues to improve the quality of revenue by reducing project-based contract revenue with low profit margins.
International business: The retail business is growing strongly, and losses due to increased investment have increased. FY3Q2024, Alibaba Digital Commerce achieved revenue of 28.5 billion yuan (yoy +44%), adjusted EBITA of 3.15 billion yuan (profit margin -11.0%, yoy-7.7pct), and overall orders increased 24% year over year, driven by strong growth across all AIDC retail platforms, especially AliExpress's cross-border business choice. 1) The international retail business achieved revenue of 23.26 billion yuan (+56%), by platform: a) AliExpress: Achieved a year-on-year increase in orders of more than 60%, mainly driven by Choice. In January 2024, Choice orders accounted for about half of AliExpress's total order volume, and continued to grow rapidly. b) Trendyol: Recorded strong double-digit order growth. While Turkey maintained its lead, it expanded its business to the Middle East with a rich supply of products and a fast and reliable logistics experience. c) Lazada: Continuing to focus on improving operational efficiency. As monetization rates further increased and logistics costs decreased, losses per order continued to narrow year-on-year in the current quarter. 2) The international wholesale business achieved revenue of 5.26 billion yuan (+8%).
Cainiao: Cross-border logistics fulfillment solutions drive revenue growth. FY3Q2024, Cainiao achieved revenue of 28.5 billion yuan (yoy +24%), and adjusted EBITA of 960 million yuan (profit margin 3.4%). Cainiao further expanded the scope of global 5-day premium logistics services. Two new countries were added this quarter, and the number of orders for the global 5-day premium logistics service achieved a strong month-on-month increase in three-digit growth.
Local life: Income is hungry? Driven by healthy growth and Gaode's rapid growth, losses continue to narrow.
FY3Q2024, the local lifestyle business achieved revenue of 15.2 billion yuan (+13%), and adjusted EBITA was -2.1 billion yuan (profit margin -14%, +8.2 pct). In the current quarter, Local Life Group orders increased by more than 20% year on year; by the end of 2023, annual active consumers had exceeded 310 million, and annual purchase frequency increased strongly year over year. Driven by increased business scale and efficiency, business losses continued to narrow.
Big Entertainment Business: Revenue was driven by strong growth in Alibaba Pictures' offline entertainment business. The FY3Q2024 Entertainment business achieved revenue of 5 billion yuan (yoy +18%), and adjusted EBITA was -5.2 billion yuan (profit margin -10.3%).
This quarter, Damai drove rapid year-on-year growth in GMV by providing services for almost all major concerts in China; Alibaba Pictures Film Division participated in the production and promotion of total box office, accounting for more than half of China's total box office.
The company's increased share repurchase efforts showed confidence in development. In the 2023 natural year, the company used a total of US$9.5 billion to repurchase a total of 897.9 million shares. In addition, the board of directors of the company approved an increase of 25 billion US dollars in the share repurchase plan, which is valid until the end of March 2027. After the scale was raised, there will be a share repurchase amount of US$35.3 billion over the next three fiscal years, demonstrating the company's confidence in future development.
We adjusted the company's FY2024-2026 revenue forecast to 9379/10231/1101.2 billion yuan (the original FY24-26 forecast was 9584/10623/11404 billion yuan), and the adjusted net profit was 1604/1600/173.8 billion yuan (the original FY24-26 forecast was 1672/1672/179.4 billion yuan). PE estimates the company's market value of $1760.1 billion, corresponding to a value of HK$95.20 per share (RMB 1.102 to HKD exchange rate), maintaining a “buy” rating.
Risk warning: industry competition intensifies, independent listing of business groups falls short of expectations, and stricter industry regulations