According to the company's financial report and the company's official account, the company announced FY25Q2 (24Q3 calendar year) results. Revenue increased 5% year-on-year to 236.5 billion yuan, and adjusted EBITA was 40.56 billion yuan, a year-on-year decrease of 5.3%, corresponding to a margin of 17.2%. FY25Q2 repurchased 0.405 billion of common stock (worth $4.1 billion), a 2.1% reduction from the 24Q2 issued share capital.

Taotian Group: FY25Q2 Taotian Group achieved a 1% year-on-year increase in revenue to 98.99 billion yuan, and EBITA decreased 5% to 44.59 billion yuan. GMV achieved growth in the current quarter, and the monetization rate was stable. CMR revenue also increased 2.5% to 70.36 billion yuan, mainly due to the double-digit increase in the number of 88VIP users (over 46 million); the company continued to invest in user experience and merchant ecosystem improvements, and the number of FY25Q2 orders increased by double digits over the same period last year. Meanwhile, according to Tmall and Qianniu Headline, the platform cancelled annual fees and increased technology usage fees this quarter (affecting only September), which hedged the impact on commissions. During the Double 11 period, the number of buyers reached a record high, and the number of 88VIP orders also increased by 50%.

Cloud Intelligence Group: FY25Q2 Cloud Intelligence Group achieved a 7% year-on-year increase in revenue to 29.61 billion yuan, and adjusted EBITA increased 89% year-on-year to 2.66 billion yuan. Among them, public clouds maintained double-digit growth, AI-related revenue achieved three-digit year-on-year growth, and their share of revenue continued to increase. International business: FY25Q2 International Business achieved a 29% year-on-year increase in revenue to 31.67 billion yuan, and the EBITA was -2.9 billion yuan, thanks to AliExpress order growth and loss reduction.

Profit forecast and investment advice: Alibaba's non-GAAP net profit for FY2025-2027 is estimated to be RMB 160.5/187.9/205.7 billion, respectively. Based on SOTP, FY2025 Chinese commercial profits were valued at 10X PE, and cloud computing revenue was valued at 2X PS, corresponding to the reasonable value of US stocks of 119.95 USD/ADS and HK$116.69 per share of Hong Kong stocks, all maintaining a “buy” rating.

Risk warning. Industry competition intensifies; consumer sentiment weakens; industry price war escalates, etc.