Alibaba's revenue grew in 2024Q4. Ali's revenue for the 2024Q4 fiscal quarter was 221.9 billion yuan, a year-on-year increase of 7%. Among them, Taotian Group, International Digital Business Group, Local Life Group, Cainiao Group, Cloud Intelligence Group, and Dawen Entertainment Group were 932/274/146/246/256/49 billion yuan, YOY +4%/45%/19%/30%/3%/-1%, respectively. The company's adjusted EBITA for the quarter was 24 billion yuan, yoy -5%; adjusted net profit to mother was 25.3 billion yuan, yoy -9%. In fiscal year 2024, the company's revenue was 941.2 billion yuan, yoy +8%; adjusted net profit to mother was 158.4 billion yuan, yoy +10%.
Taotian: Focusing on price power and user experience, GMV grew by double digits year over year. Taotian focuses on price power and user experience strategies to increase investment. In the 2024Q4 fiscal quarter, there was a strong increase in the number and frequency of purchases, driving online GMV and order volume to achieve double-digit year-on-year growth. China's retail revenue was 88.3 billion yuan, yoy +3%, of which customer management revenue also increased 5%, mainly driven by search and recommendation revenue. The number of 88VIP members exceeded 35 million, a year-on-year double-digit increase.
Cloud intelligence: Public clouds are growing healthily, and AI-related revenue is soaring. Alibaba Cloud's revenue increased 3% year-on-year this quarter, with double-digit year-on-year growth for core public cloud products and a gradual decline in project-based revenue, driving profit improvement. Furthermore, AI-related revenue achieved three-digit year-over-year growth. The adjusted EBITA was 1.43 billion yuan, yoy +45%, the adjusted EBITA margin was 5.6%, yoy+1.6pct.
AIDC maintained high growth and withdrew Cainiao's listing application. Overall AIDC orders increased by about 20% year-on-year during the 2024Q4 fiscal quarter. Among them, Choice led AliExpress to achieve growth, Trendyol maintained double-digit order growth, and Lazada's losses per order continued to narrow year over year. AIDC adjusted EBITA to -4.1 billion yuan. The increase in losses was mainly due to increased investment in cross-border business.
On Cainiao's side, AliExpress's cross-border logistics fulfillment services have boosted Cainiao's revenue growth this fiscal season. In March, Ali withdrew Cainiao's listing application. In the future, Cainiao will achieve better collaboration with e-commerce businesses.
Revenue is expected to continue to grow, driving major listings in Hong Kong. According to the results report, the company expects domestic e-commerce GMV to grow strongly in FY2025 and enhance monetization in the second half of FY2025. The cloud business is expected to achieve double-digit revenue growth in the second half of FY2025. AIDC continues to grow rapidly while improving UE. On the profit side, as the company's strategy focuses on core business and increases investment in e-commerce and cloud computing at home and abroad, we expect short-term profit growth or pressure.
Ali said it has been preparing for the main listing in Hong Kong. Currently, it is expected that the conversion will be completed by the end of August 2024. After the main listing in Hong Kong, we expect to be included in the Hong Kong Stock Connect and improve liquidity.
Investment advice: Maintain a “buy” rating. We expect Ali's revenue for the 2025-2027 fiscal year to be 10147/10917/1169.3 billion yuan; non-GAAP net profit to mother is 1579/1673/179.1 billion yuan. Based on core e-commerce 10x 2025e P/E, cloud computing 3x 2025e P/S, big entertainment and other businesses 2x 2025e P/S, Alibaba Hong Kong Stock (9988.HK) was given a target price of HK$113 /US stock (BABA.N) of $115, maintaining a “buy” rating.
Risk warning: The impact of industry policies on business exceeded expectations, progress in e-commerce and cloud computing fell short of expectations, and changes in the macro environment exceeded expectations.