VALUATION HIGHLIGHTS

1. Taobao and Tmall Group constitutes 32% of the Trefis price estimate for Alibaba Group's stock.
2. Other Business constitute 19% of the Trefis price estimate for Alibaba Group's stock.
3. Cloud Computing constitutes 9% of the Trefis price estimate for Alibaba Group's stock.

WHAT HAS CHANGED?

1. Latest Earnings

Alibaba posted a better-than-expected set of Q3 FY'25 results. Adjusted net profit stood at 51 billion yuan ($7 billion), up 6% from a year ago. The earnings beat was driven by the company's cloud business and core e-commerce operations.

Note: FY'24 ended on March 31, 2024. Q3 FY'25 ended on December 31, 2024

2. Alibaba's strong cross boarder growth

Alibaba’s cross-border e-commerce platforms, including AliExpress, have emerged as significant growth drivers, with revenues soaring 32% to 37.8 billion yuan ($5.2 billion) in Q3 2024. This surge is likely attributed to robust performance from initiatives like the AliExpress Choice program, which offers free shipping and additional benefits.

BUSINESS SUMMARY

Alibaba is a Chinese technology company focusing on e-commerce, logistics, cloud computing, digital media, and other subscription software. While the company reports its business in four segments, we have reworked its structure into five segments that better capture Alibaba's business based on its operations. The China Commerce segment revenues are derived from retail e-commerce and associated marketing services in China. Digital Media & Innovation Initiatives segment revenues are derived from content subscription, software subscription, and merchant advertising offerings. China Wholesale & Other revenues are derived from wholesale commerce and logistics services, primarily driven by Chinese consumption. International Commerce segment revenues are derived from retail and wholesale operations and advertising services outside China. Cloud Computing segment revenues are derived based on customers' duration and usage of Alibaba's service.