【行业研究报告】阿里巴巴-Core earnings a nice beat; Cloud revenue growth has the potential to accelerate further

16May2025CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateAlibaba(BABAUS)Coreearningsanicebeat;CloudrevenuegrowthhasthepotentialtoacceleratefurtherAlibabareported4QFY25(Marchyear-end)results:totalrevenuewasRMB236.5bn,up6.6%YoY,largelyinlinewithourforecastandBloombergconsensus;adjustedEBITAforthequarterwasRMB32.6bn,up36%YoY,drivenbyprofitabilityimprovementacrossallbusinesssegments,alsoinlinewithconsensus.Alibabadeliveredstronger-than-expectedearningsgrowthforTaobaoandTmall(T&T)Group,whilethiswaspartlyoffsetbywider-than-expectedlossgeneratedfromLocalServicesGroup(LSG)andCainiao.“Cloud+AI”,aswellase-commercearetwokeystrategicdevelopmentareasforAlibabainthecomingyears.WearepositivethatsolidearningsgrowthofT&TGroupcouldsustainin1QFY26,drivenbyincreasesintakerateandhealthyGMVgrowth,whilewenotethatacceleratedinvestmentininstantcommercecouldweighonnear-termearningsgrowth,especiallywhenindustrycompetitionisintensifying.Forcloud,wearelookingforacontinuedaccelerationinYoYrevenuegrowthsequentiallyin1Q,andbelieveAlibaba’sinvestmenttoenhanceitsinfrastructureandR&Dcapabilitiesshouldpavethewayforlong-termgrowth.WerolloverourSOTP-basedvaluationtoFY26EwithanewTPofUS$155.5,translatinginto15.7xFY26EPE(non-GAAP).BUY.SolidEBITAgrowthofT&TGroupshouldsustain.AlibabageneratedRMB71.1bnincustomermanagementrevenue(CMR)in4QFY25,upRMB71.1bnincustomermanagementrevenue(CMR)in4QFY25,up11.8%YoY,and4%betterthanconsensus,drivenbycontinuousincreasesintakerateaidedbygrowingpenetrationofQuanzhantuiandincrementaltechnologyservicesfeecharges.AdjustedEBITAofT&TGroupcameinatRMB41.7bn,up8.4%YoYand6%aheadofconsensus,inourviewdrivenbysolidCMRrevenuegrowthandmoreoptimized-than-expectedspendingtoenhanceuserexperience.WebelievethesolidEBITAgrowthtrendcouldsustainin1QFY26,asthepenetrationofQuanzhantuistillhasroomtorisefurther,althoughthegrowthcouldpartlyoffsetbytheincrementalinvestmentjointlywithLSGtosupportinstantcommercebusinessdevelopment.Cloudrevenuegrowthhasthepotentialtoacceleratefurther.ForCloudIntelligenceGroup(CIG),segmentrevenuecameinatRMB30.1bnin4QFY25,up18%YoY,andwas1%aheadofconsensus.ManagementhighlightedstrongdigitalizationdemandacrossverticalsandisconfidentthatYoYgrowthofcloudrevenuecouldacceleratefurther.Itremainscommittedtothelong-termgrowthopportunitiesofcloudbusiness,andwillsustaininvestmentintechnologyandR&Dtopropelfurthergrowth.AIDC:targettoachievesingle-quarterbreakeveninFY26maintained.ForAIDC,revenuecameinatRMB33.6bnin4QFY25,up22%YoY(3QFY25:32%),andwas4%lowerthanconsensus.TheadjustedEBITAlossofAIDCshrankbothQoQandYoYtoRMB3.8bn(3QFY25:RMB5.0bn;4QFY24:RMB4.1bn).Managementwasbalancingbusinessscaleexpansionwithprofitabilityimprovementin4QFY25,andreiterateditstargettoachievethefirstquarterofprofitabilityinFY26.Changeinforecast.WelowerourFY26-27Erevenueforecastbyboth5%toreflectthecutinrevenueforecastforAIDC,anddeconsolidationofSunArtsinceFeb2025,andwecutnon-GAAPnetprofitby7-9%tofactorintheincrementalinvestmentmadebybothT&TGroupandLSGtoacceleratetheinvestmentininstantcommercebusiness.However,weremainpositivethatAlibabawillbeoneofthekeybeneficiariesintheAIera,supportedbyitsdiversifiedusecasescenariosandtechnicalcapabilities.