Li_DanLi_Dan ・ May. 15, 2024
Alibaba Shares Fall 6% after Q4 Profit Plunges despite Overseas Commerce Surge
Alibaba's revenue increased 7% year-over-year, beating analysts' estimates, and revenue from Alibaba International Digital Commerce surged 45% in the quarter ended March.

TMTPost -- The American depositary receipts (ADRs) of Alibaba Group fell about 6% on Tuesday, underperforming the U.S. stock benchmark S&P 500 that edged up 0.48% to a close near its record set late March.  The shares selloff came after the Chinese largest e-commerce group posted stronger-than-expected revenue while net profit suffered a plunge of 86%.

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Alibaba reported revenue of RMB221.87 billion (US$30.73 billion) in the fourth fiscal quarter ended March 31, 2024, representing a 7% year-over-year (YoY) growth, beating analysts’ estimated RMB 219.79 billion. On Non-GAAP basis, the company earned RMB10.14 diluted earnings per American depositary share (ADS) that quarter with a 5% YoY decrease, whereas analysts projected RMB10.27 per ADS. This marked the second quarterly miss in a row.

Net income attributed to ordinary shareholders decreased 86% YoY to RMB3.27 billion and Non-GAAP net income of RMB24.42 billion with a 11% YoY decline. Alibaba said the significant 86% decrease was primarily due to a net loss from investments in public-traded companies during the March quarter, compared to a net gain a year ago. The non-GAAP adjusted EBITA, excluding share-based compensation expense, impairment of intangible assets and goodwill and certain other items, dropped 4.1% YoY to RM30.81 billion, better than the expected RMB30.38 billion.

Taobao and Tmall Group, Alibaba’s top business segment that includes two major online marketplaces, brought RMB93.22 billion with a 4% YoY rise, accelerating from a 2% increase in the previous quarter. Adjusted EBITA in the March quarter shed 1% YoY to RMB38.5 billion, compared with a 1% increase in three months ago.  . Notably, customer management revenue grew 5% year-over-year, driven by robust revenue growth from search and recommendations.

One of highlights in the March quarter came from Alibaba International Digital Commerce Group (ADIC), the second biggest segment by sales. Its revenue soared 45% YoY to RMB27.45 billion, while adjusted EBITA loss widened to RMB410 million from loss of RMB220 million a year earlier. The combined orders of AIDC’s marketplaces grew 20% YoY. Alibaba said the strong performance was driven by growth of AIDC’s cross-border businesses, in particular growth contributed by the Choice business on AliExpress.

Cloud Intelligence Group, the segment overtaken by ADIC in the previous quarter, generated RMB25.595 billion, up 3% YoY, and adjusted EBITA surged 45% YoY to RMB1.43 billion. Alibaba said its core public cloud offerings, which include products such as elastic compute, database and AI products, recorded double-digit YoY growth in revenue, and overall revenue excluding Alibaba-consolidated subsidiaries decreased slightly YoY as it transitioned away from low-margin project-based revenues.The company expected the strong revenue growth in public cloud and AI-related products will offset the impact of the roll-off of project-based revenues.

“This quarter’s results demonstrate that our strategies are working and we are returning to growth. Our China and international commerce businesses realized double-digit year-over-year GMV growth through our focus on the customer experience. We are also excited by the accelerated growth of customers and cloud computing revenues related to our AI products,” said Alibaba CEO Eddie Wu.

Alibaba disclosed it had repurchased a total of 524 million ordinary shares, equivalent of 65 million ADSs, for a total of US$4.8 billion during the March quarter. The board of directors has approved a two-part dividend of around US$4.0 billion, which consists of an annual regular cash dividend of fiscal year 2024 in the amount of US$0.125 per order share and a one-time extraordinary cash dividend as a distribution of proceeds from disposition of certain financial investments in the amount of US$0.0825 per ordinary share as of the close of business on June 13, 2024.  

Alibaba also updated progress of voluntary conversion of dual listing on the Hong Kong Stock Exchange. It first floated the plan to upgrade its secondary listing in Hong Kong to a primary listing, and now expects to complete this conversion by the end of August.

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