Alibaba Stock Dips as Huge Investment Losses In Q4 Overshadow Revenue Growth and Dividend

Alibaba Group Holding Limited BABA stock is trading lower Tuesday after the company reported its quarterly results. 

The Jack Ma co-founded e-commerce giant reported fiscal fourth-quarter 2023 revenue growth of 7% year-on-year to $30.73 billion, beating the analyst consensus estimate of $30.40 billion. Adjusted earnings per ADS of $1.40 missed the analyst consensus estimate of $1.41. 

Net income plunged 86% Y/Y to $453 million due to net loss from its investments in publicly traded companies during the quarter. Adjusted net income declined 11% Y/Y to $3.38 billion.

Segments: Taobao and Tmall Group revenue grew 4% year over year to $12.91 billion. Alibaba International Digital Commerce Group revenue increased by 45% year over year to $3.80 billion. Local Services Group revenue grew by 19% year over year to $2.03 billion, driven by Ele.me and Amap. 

Cainiao Smart Logistics Network Limited’s revenue increased 30% year over year to $3.40 billion, primarily due to revenue from cross-border fulfillment services supporting AliExpress. 

Cloud Intelligence Group revenue grew by 3% Y/Y to $3.55 billion. Digital Media and Entertainment Group decreased Y/Y by (1)% Y/Y to $685 million due to a modest decline in Youku’s revenue. All others revenue declined by (3)% Y/Y at $7.13 billion.

In the Taobao and Tmall Group, the customer management revenue grew 5% Y/Y, driven by robust revenue growth from search and recommendations.

Revenue from China’s commerce retail business grew by 3% year over year to $12.22 billion. Direct sales and other revenue declined by 2% year over year to $3.42 billion.

Revenue from our China commerce wholesale business grew by 20% Y/Y to $686 million.

Alibaba International Digital Commerce Group: International commerce retail business revenue grew by 45% year over 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 Y/Y order growth, driven by Choice, Trendyol continued its robust double-digit order growth, and Lazada’s loss per order continued to narrow Y/Y.

Cloud Intelligence Group: During the quarter, Alibaba’s core public cloud offerings recorded double-digit Y/Y revenue growth. AI-related revenue experienced accelerated growth and continued to record triple-digit growth Y/Y.

Cainiao Smart Logistics Network Limited: In March, Cainiao withdrew its initial public offering on the Hong Kong Stock Exchange to work more closely with AliExpress to strengthen its comprehensive end-to-end cross-border delivery capabilities. During the quarter, Cainiao extended its premium delivery to four additional countries, bringing the total coverage to 14 countries.

Cainiao will continue to execute its strategy of building a global smart logistics network.

Digital Media and Entertainment Group: Alibaba Pictures’ movie business revenue grew, while revenue of its online ticketing platform for live events, Damai, grew rapidly Y/Y.

Dividend: The board approved a $4.0 billion dividend for fiscal year 2024. It approved a two-part dividend comprised of an annual regular cash dividend of $1.00 per ADS and a one-time extraordinary cash dividend of $0.66 per ADS.

Stock Buyback: 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 said it is preparing for its primary listing in Hong Kong and expects to complete this conversion by the end of August 2024. 

BABA stock has lost over 4% in the last 12 months. Investors can gain exposure to the stock via the Invesco Golden Dragon China ETF PGJ and the ProShares Online Retail ETF ONLN.

Price Action: BABA shares traded lower by 4.96% at $80.40 premarket at the last check Tuesday.

Alibaba Photo Via Shutterstock