Alibaba sees decline in stock value

Alibaba Group Holding Limited witnessed a decline in its stock value on Tuesday following the release of its quarterly financial results.

For the fiscal fourth quarter of 2023, the e-commerce giant, co-founded by Jack Ma, reported a revenue growth of 7% year-on-year, amounting to $30.73 billion. This surpassed the analyst consensus estimate of $30.40 billion. However, the adjusted earnings per ADS of $1.40 fell short of the analyst consensus estimate of $1.41. Net income experienced a significant decline of 86% year-on-year to $453 million, attributed to net losses from investments in publicly traded companies during the quarter. Adjusted net income also decreased by 11% year-on-year to $3.38 billion.

In terms of revenue segments, Taobao and Tmall Group revenue grew by 4% year-on-year to $12.91 billion, while Alibaba International Digital Commerce Group revenue increased by 45% year-on-year to $3.80 billion. Local Services Group revenue saw a growth of 19% year-on-year to $2.03 billion, driven by Ele.me and Amap. Cainiao Smart Logistics Network Limited’s revenue surged by 30% year-on-year to $3.40 billion, primarily due to revenue from cross-border fulfilment services supporting AliExpress. Cloud Intelligence Group revenue experienced a 3% year-on-year growth to $3.55 billion, whereas Digital Media and Entertainment Group witnessed a decrease of 1% year-on-year to $685 million.

Within the Taobao and Tmall Group, customer management revenue grew by 5% year-on-year, driven by strong revenue growth from search and recommendations. Revenue from China’s commerce retail business grew by 3% year-on-year to $12.22 billion, while revenue from China commerce wholesale business grew by 20% year-on-year to $686 million.

Alibaba International Digital Commerce Group reported a significant growth in international commerce retail business revenue, up by 45% year-on-year to $3.80 billion, driven by AIDC’s cross-border businesses, particularly the growth contributed by the Choice business on AliExpress.

During the quarter, AliExpress continued its robust year-on-year order growth, driven by Choice, while Trendyol sustained its robust double-digit order growth, and Lazada’s loss per order narrowed year-on-year.

Cloud Intelligence Group experienced double-digit year-on-year revenue growth in Alibaba’s core public cloud offerings, with accelerated growth in AI-related revenue, recording triple-digit growth year-on-year.

Cainiao Smart Logistics Network Limited withdrew its initial public offering on the Hong Kong Stock Exchange in March to strengthen its comprehensive end-to-end cross-border delivery capabilities in collaboration with AliExpress. During the quarter, Cainiao extended its premium delivery to four additional countries, expanding the total coverage to 14 countries. Cainiao aims to continue executing its strategy of building a global smart logistics network.

Alibaba Pictures’ movie business revenue grew within the Digital Media and Entertainment Group, while revenue of its online ticketing platform for live events, Damai, experienced rapid year-on-year growth.

Regarding financial decisions, the board approved a $4.0 billion dividend for fiscal year 2024, comprising an annual regular cash dividend of $1.00 per ADS and a one-time extraordinary cash dividend of $0.66 per ADS. Additionally, during Q4, Alibaba repurchased 65 million ADS worth $4.8 billion in both the U.S. and Hong Kong markets under the share repurchase program.

Alibaba announced its preparation for a primary listing in Hong Kong, expecting to complete the conversion by the end of August 2024.

BABA stock has experienced a decline of over 4% in the last 12 months. Investors can access exposure to the stock through the Invesco Golden Dragon China ETF (NASDAQ:PGJ) and the ProShares Online Retail ETF (NYSE:ONLN).

At the last check on Tuesday, BABA shares traded lower by 4.96% at $80.40 premarket.