阿里巴巴集团控股有限公司：云业务增长加速，但因投资导致利润率承压

Restricted - External Earnings ReviewBABAChina TechnologyPrice TargetPrice (13-May-25)Potential Upside/DownsideSource: Bloomberg, Barclays ResearchMarket Cap (USD mn)Shares Outstanding (mn)Free Float (%)52 Wk Avg Daily Volume (mn)Dividend Yield (%)Return on Equity TTM (%)Current BVPS (USD)Source: BloombergPrice PerformanceExchange-NYSE52 Week rangeUSD 148.43-71.80Source: IDCLink to Barclays Live for interactive chartingChina TechnologyJiong Shao, CFA+1 212 526 5562jiong.shao@barclays.comBCI, USLian Xiu (Roger) Duan+1 212 526 4633lianxiu.duan@barclays.comBCI, USXinyao Song+1 212 526 6972xinyao.song@barclays.comBCI, US 3140872385.78N/A20.70.7511.97421.36 Mar-Q Earnings UpdateFinancialsRevenue:BABA reported total revenue of RMB 236bn, up 6.6% yoy, largely in line with ourestimate. By segment, CMR revenue was RMB 71bn, accelerating growth to 11.8% yoy; AIDCrevenue was RMB 34bn, up 22.3% yoy; Cloud revenue was RMB 30bn, accelerating growth to17.7% yoy.Gross profit:Gross profit was RMB 91bn with gross margin of 38.6%, +182bps higher than ourestimate.OPEX:S&M expense was RMB 36bn, G&A expense was RMB 10bn, and product developmentexpense was RMB 13bn.Adj. EBITA:Group adj. EBITA was RMB 33bn with a margin of 13.8%, -57bps vs our estimates.Specifically, TTG was 41.2%, +119bps higher than our estimate; Cloud was 8.0%, Cainiao was -2.8%, AIDC was -10.6%, local services was -14.4%, digital media and entertainment marginturned profit to 0.6%, while these segments all narrowed loss margins or expanded profitabilitycompared to a year ago.Adj. Net income:Adj. net income was RMB 30bn, -12.6% lower than our estimate.Shareholder return:In Mar-Q, BABA repurchased 51mn ordinary shares worth $0.6bn. For fiscalyear ended March 31, 2025, it repurchased shares worth $11.9bn, representing a 5.1% ofoutstanding shares. In addition, BABA approved a two-part dividend in the total amount of $2per ADS, with an aggregate amount of $4.6bn. The payment is expected in July.4 FIGURE 1. Actual vs estimateSource: Company Reports, Barclays Research15 May 2025 FIGURE 2. Segment actual vs estimateSource: Company Reports, Barclays Research15 May 2025Barclays | Alibaba Group Holding Ltd. Business UpdateTaobao and Tmall Group (TTG)CMR growth surged to DD level at 12% yoy in Mar-Q, significantly higher than our expectations,primarily fueled by take rate expansion and partly by GMV growth. For context, 1Q onlinephysical retail sales increased 5.7% yoy, while BABA aims at GMV growth and stabilizing marketshare, which we believe is on track. Monetization could further unlock the upside, driven by(1)the 0.6%softwareservice fee rolled out from September 2024, which started in a low base andmanagement plans to gradually roll back some merchant rebates, as such driving take rateincrease in the coming fiscal year;(2)ad tool Quanzhantui, released in April 2024, which BABA isincreasing adoptions and wallet shares and expects incremental ad budget particularly fromSMEs and white-label merchants; and(3)exploring more monetization products in the longterm such as through AI initiatives. Management highlighted that in the near term, searchrecommendations and ads powered by AI remain a high priority, and its initialeffortson that 5 front have already borne fruit in areas such as improved user experience, more preciserecommendations and improved adefficiency.Amid the fast-growing and intense competition in on-demand deliveries, Taobao launchedInstant Commerce service in May. Management shared that short-term priority is to convertTaobao users quickly to the new product, and it has seen healthy user retention with highengagement and frequency. As such, investment could be significant for scaling, but we believeits existing mature merchant base as well as on-demand logistics network could helpoffsetabit. In Mar-Q, TTG adj. EBITA margin came in higher than our estimate at 41.2%, and we expectthe take rate expansion and operating leverage to help segment maintain solid margins goingforward.CloudCloud achieved 18% yoy revenue growth, the strongest over the past few years, driven by AICloud that maintained triple-digit yoy growth for seven consecutive quarters. BABA has seenstrong AI products adoption across broad sectors such as internet, retail, manufacturing andmedia, and is capitalizing on their migration to Cloud services. Incremental growth is throughAPI calls, post-training demand on top of open-source models to meet enterprise's internalproprietary applications, and migration from traditional CPU-based cloud to AI compute. Andcustomer demand is primarily driven by inference, which is growing fast. In fact, new customersand new demand flooded inafterChinese New Year and demand maintained strong in April andMay, mainly attributable to inference workload. BABA is optimistic about the large-scale AIadoption in the next several months.Its continuous and dedicated innovation in LLMs have helped strengthen the competitive moat.In April, BABA released Qwen3 series m