20240208-招银国际-Enhancing_shareholder_return_while_remaining_ambitious_on_investment_to_drive_growth_8页_689kb

Alibaba (BABA US) reported its third-quarter fiscal year 2024 (FY24) results, with total revenue of RMB260.3 billion, a 5% year-over-year increase, and non-GAAP net income of RMB48.2 billion, a 4% YoY decrease, both largely in line with Bloomberg consensus expectations. Management emphasized its commitment to shareholder returns through an upsized share repurchase program to US$35.3 billion, aiming for at least a 3% annual reduction in total shares outstanding by March 2027. Key business strategies include investing in core areas like Taobao, cloud, and international commerce to drive long-term growth, while focusing on reducing losses in non-core businesses and exiting them when market conditions improve.

The Cloud Intelligence Group (CIG) showed strong performance with an adjusted EBITA margin of 8.4% in Q3FY24, up 3.8 percentage points YoY, driven by product mix improvements. Major business segments like Taobao and Tmall Group experienced modest revenue growth, while Alibaba International Digital Commerce Group (AIDC) posted significant growth of 43.8% YoY, fueled by retail platforms and monetization efforts. Non-core business exits are planned strategically.

The Bank of America Merrill Lynch (Bloomberg) sets a SOTP-based target price of US$137.1 per ADS, implying a 75.3% upside from the current price, and reiterates a BUY rating. Forecast revisions show stable expectations for revenue and profitability growth over the next few years, with neutral valuation metrics.

Overall, Alibaba is pursuing a balanced approach of enhancing shareholder returns through repurchases while investing aggressively in core growth areas to achieve sustainable long-term value.