The Zhitong Finance App learned that BOC International released a research report saying that maintaining the Alibaba-SW (09988) “buy” rating, the short-term investment is aimed at resuming e-commerce user experience and GMV growth, and gradually driving the overall recovery of advertising revenue. It believes that the profit growth rate is a short-term impact. The company's stock price fell to the bottom range, focusing on the performance of key business revenue indicators and shareholder feedback. The target price was HK$107.

The main views of JBC International are as follows:

FY2024 4th quarter (March quarter) results:

Total revenue was 221.9 billion yuan (same below), up 7% year on year, basically in line with the bank/market expectations. Among them, Taotian +4%/International +45% /Cloud +3% /Local Life +19% /Cainiao +30% /Big Entertainment -1%. The adjusted profit per share was 10.14 yuan, down 5% year on year, basically in line with the bank's expectations/3% lower than market expectations. The adjusted EBITA profit margin was 11%, a slight decrease of 1 percentage point from the previous year, mainly due to increased investment in e-commerce business and additional incentives for employees after Cainiao's IPO was withdrawn.

Performance highlights review:

1) Taotian GMV's year-on-year double-digit growth led to a 5% increase in CMR and a slight decrease in the monetization rate. Due to Taobao's GMV contribution and the current low monetization rate of the new business model, the growth gap between GMV and CMR will gradually narrow as new advertising products are launched. 2) International commercial revenue was driven by AliExpress Choice (contributing 70% of orders) and increased monetization rates, and losses increased to 4.1 billion yuan due to increased investment in AliExpress Choice and Trendyol's cross-border business development. 3) Cloud increased 3% year over year, continuing to reduce low-margin projects to improve revenue quality. Revenue from core public cloud products increased by double digits, and overseas prices were reduced in April to enhance competitiveness. Revenue from AI-related products grew by three digits. 4) Revenue growth is driven by the growth of cross-border logistics fulfillment services under the collaboration of Cainiao and AliExpress operations. 5) The company repurchased $12.5 billion in fiscal year 2024, reduced tradable shares by 5.1%, and approved a dividend payment of $4 billion. The dual main listing in Hong Kong is expected to be completed by the end of August 2024.

Outlook for the 1st quarter of fiscal year 2025:

The bank's revenue is expected to increase 7% year over year to 251.1 billion yuan, mainly due to 1) AIDC's overseas e-commerce business is still growing rapidly, with an expected increase of 39%, and 2) local e-commerce is expected to grow at a GMV rate of 4% and a CMR growth rate of 3%. The driving effect of advertising products on the entire site on revenue will begin in the second half of the fiscal year. 3) Driven by public cloud and AI-related revenue, cloud business revenue will resume double-digit growth after the next 2 quarters. Since both domestic and overseas e-commerce are still in the investment period, and AIDC has yet to start marketing investment in the same period last year, the company's overall EBITA growth rate may still be under pressure.