Everbright Securities predicts that Alibaba's net profit attributable to ordinary shareholders will be 85.449/90.702/94.562 billion yuan for FY2025-27.
Everbright Securities released a research report stating that it maintains a 'buy' rating on Alibaba (SW09988). The addition of WeChat Pay to Taobao and Tmall is beneficial for further improving the platform ecosystem and enhancing the consumer shopping experience. The forecast for the company's net profit attributable to ordinary shareholders for FY2025/FY2026/FY2027 remains at 85.449/90.702/94.562 billion yuan. The company's organizational structure and development strategy have gradually become clearer. After the addition of the Hang Seng Stock Connect Index on September 4, Alibaba Group W is expected to accelerate its inclusion in the Hang Seng Stock Connect Hong Kong Index.
The main points of view of Everbright Securities are as follows:
Solicitation of opinions has been released, Taobao and Tmall plan to add WeChat Pay.
On September 4, Taobao and Tmall separately announced the "Opinion Collection on the Addition of WeChat Pay Capability to Taobao" and the "Opinion Collection on the Addition of WeChat Pay Capability to Tmall." In order to enhance the consumer shopping experience, Taobao and Tmall plan to add WeChat Pay capability and make platform rule adjustments after the collection of opinions. This adjustment will cover all Taobao and Tmall merchants.
In late July, Taotian Group announced that starting from September 1, 2024, it will charge a 0.6% basic software service fee for confirmed transactions on the Taobao and Tmall platforms, while cancelling the annual fees of 30,000 and 60,000 yuan for Tmall platform merchants. This move is beneficial for increasing the revenue and profit of Taotian Group, and also facilitates the smooth progress of WeChat Pay's plan.
In line with the trend of interconnectivity, it enhances the shopping experience of consumers.
On September 9, 2021, the Ministry of Industry and Information Technology held an "Administrative Guidance Meeting on the Issue of Blocking Website Links," requiring all platforms to lift the blockage within a specified period according to the standards. Alibaba, Tencent, ByteDance, Baidu, Huawei, Xiaomi, Momo, 360, Netease, and other companies all attended the meeting. In August 2021, Taobao APP integrated with UnionPay QuickPay. At the same time, Alibaba's subsidiaries, including Ele.me, Youku, Damai, Kaola, and Shuqi, have all integrated with WeChat Pay. At that time, Taote, Xianyu, Hemao, and other apps have also applied for integration with WeChat Pay and are awaiting WeChat's review. The plan to add WeChat Pay to Taobao and Tmall aligns with the trend of Internet interconnection and is conducive to building a more healthy Internet ecosystem and further enhancing the consumer shopping experience. On August 30, 2024, the State Administration for Market Regulation issued an announcement declaring that the Alibaba Group has completed its three-year rectification and achieved good results.
For Alipay, openness is conducive to further expanding the development space of Alipay. On September 4th, Meituan's core businesses, including "Meituan Delivery", "Meituan Pharmacy", "Meituan Power Bank", "Meituan Bike", "Meituan Errands", and "Meituan Hotel", were launched on the Alipay mini program. At the same time, Alipay stated that it will continue to deepen strategic cooperation with Taotian Group, not only in payment products, but also in internet technology, AI technology products, and broader ecosystem open collaboration.
Risk warning: The development of new businesses is slower than expected, industry competition intensifies, and the impact of live e-commerce.
