Alibaba released FY2023Q4 results, achieving revenue of 208.2 billion yuan this quarter, +2% year on year; adjusted EBITA of 25.28 billion yuan, +60% year on year; and non-GAAP net profit of 27.38 billion yuan, +38% year on year. The competitiveness of the company's main e-commerce business is stable, increasing user investment to seek long-term growth. Furthermore, the company's orderly promotion of spin-offs and listings is expected to bring new vitality to the growth of various businesses and maintain its “highly recommended” rating.
Chinese business: GMV is recovering steadily, and increased user investment is expected to drive sustainable growth. FY23Q4 Chinese business achieved revenue of 136.07 billion yuan, a year-on-year decrease of 2.9%, of which customer management revenue was 60.27 billion yuan, down 5% from the previous year, and the decline narrowed month-on-month. With the gradual recovery of domestic macroeconomics, Taobao Tmall GMV resumed positive growth in March, with strong growth in clothing and health products. On the profit side, Taote Taocai's losses continued to narrow year-on-year. The FY23Q4 Chinese commercial sector achieved EBITA of 38.49 billion yuan, an increase of 19.4% over the previous year.
Looking ahead to future development, in the face of consumer recovery opportunities and industry competition challenges, Taobao Tmall Business Group updated its development strategy. The user side strengthened entertainment content construction to increase user time and stickiness, the supply side increased support for small and medium-sized businesses and increased product richness. The platform side enhanced the platform's price competitiveness by optimizing marketing functions, while increasing investment in AI technology innovation to improve the overall consumer experience and seek long-term sustainable growth.
International business: The platform business is expanding steadily, and revenue is growing rapidly. The FY23Q4 international business sector achieved revenue of 18.54 billion yuan, an increase of 29.3% over the previous year, and the growth rate improved month-on-month. Its international retail revenue increased sharply by 41.3% year on year. On the one hand, it stemmed from AliExpress's addition of Choice services, which drove the steady expansion of the platform's business. Order volume increased double-digit year-on-year. On the other hand, Lazada expanded its seller size and expanded value-added services to enhance monetization. On the profit side, international commerce increased investment this quarter while maintaining efficient operations. The profit level remained stable year over year. The adjusted EBITA loss was -233 billion yuan, and profit margin increased 5 pct over the same period last year.
Cloud business: Short-term revenue pain, price reductions in public cloud products & AI technology innovation drive long-term development. The FY23Q4 cloud business achieved revenue of 18.58 billion yuan, a year-on-year decrease of 2.1%, mainly due to the delayed delivery of hybrid cloud projects due to the January pandemic, and the impact of the year-on-year decline in demand for CDM services due to the decline in demand for telecommuting after the epidemic ended in February and March. Looking at the long term, Alibaba Cloud's growth potential is still broad. The company's price reduction of public cloud core products based on the cost advantages brought about by the scale effect will expand the number of SME customers and consolidate its leading edge in the industry. Furthermore, the continuous promotion of large-scale AI model applications is expected to contribute new volume.
Promoting spin-offs and listings in an orderly manner is expected to drive an increase in corporate value. The company continues to promote spin-off and listing. Cloud Intelligence Group plans to achieve a complete spin-off and independent listing through shareholders' dividend distribution in the next 12 months; Cainiao Group received approval from the board of directors to explore listing and is expected to complete the listing plan in the next 12 to 18 months; Hema has initiated the listing process and is expected to complete the listing in the next 6-12 months; Alibaba International Digital Business Group has also begun exploring external financing to help further expand new regional markets, which is expected to continue to drive corporate value growth.
Investment advice: At present, domestic e-commerce growth in Ali continues to recover. At the same time, the company's orderly promotion of spin-offs and listings is expected to bring new vitality to the growth of various businesses. FY2024-2026 revenue is expected to be 9597.8/10432.1/1117.15 billion yuan respectively, and non-GAAP net profit is 1555.4/1864.8/213.04 billion yuan respectively, maintaining the “highly recommended” rating.
Risk warning: macroeconomic risks; increased industry competition; new business development falls short of expectations.