Alibaba reports mixed results and falls by 7% 📌

Alibaba, the Chinese giant operating in the e-commerce industry, presents mixed financial results for the first quarter of this year. It is worth mentioning that the company is listed on the New York Stock Exchange through ADS. The company loses about 7% after the results. The P/E ratio for the company is approximately 10.

Report details:

• Alibaba's revenue for the fourth quarter amounted to $30.73 billion, representing a 7% year-over-year increase and surpassing expectations by $310 million.
• Adjusted earnings per ADS (American Depositary Share) were $1.40, falling 5% year-over-year and missing analysts' expectations.
• However, looking at net profit, we see a significant decline: the net profit of the Chinese e-commerce company fell by 96% year-over-year to $127 million, mainly due to net losses from investments in public companies in the past quarter.

Company's growing segments:

• Cloud Intelligence revenue increased by 3% year-over-year to $3.55 billion.
• International commerce revenue grew by 45% year-over-year to $3.80 billion.
• Revenue from the Local Services Group, which includes Ele.me and Amap, rose by 19% year-over-year to $2.03 billion.
• Revenue from the Cainiao Smart Logistics Network increased by 30% year-over-year to $3.40 billion.

Mixed company segments:

• Revenue growth in Taobao and Tmall companies was 4% year-over-year to $12.91 billion. The gross merchandise value sold grew at a double-digit rate, and orders are also increasing significantly.
• The retail segment in China grew by 3% year-over-year to $12.22 billion. Wholesale trade grew by 20% to $686 million.
• The electronic media and entertainment segment saw a 1% year-over-year revenue decline to $685 million.

During the past quarter, the company repurchased 65 million ADS worth $4.8 billion. These shares were purchased in the USA and Hong Kong. Throughout the year, the company repurchased shares worth $12.5 billion. The company approved a two-part dividend, one standard at $1 per ADS and $0.66 per ADS in connection with the company's financial investments. The dividend is to be paid on June 13.

As can be seen, investors are not very satisfied with the publication of today's results. The company records growth in smaller business segments, while key segments show smaller growth. Sentiment towards the company may be worsened due to the temporary abandonment of plans to split the businesses into smaller parts. At the same time, the company should benefit from the positive growth wave observable in Chinese stocks.