$Alibaba (BABA.US)$US stocks will announce the fourth quarter results of the 2024 fiscal year ahead of the market on May 14. Agencies generally expect that in the latest quarter, Ali will achieve revenue of RMB 219.832 billion, an increase of 5.58% year on year; earnings per share of 5.41 yuan, a decrease of 39.88% year on year.
Since April, as market confidence in the Chinese stock market has continued to increase, Hong Kong stocks and Chinese securities have continued to rise, and Ali has rebounded nearly 10% within two months. As a result, the current financial reports of leading Technet stocks, including Ali, may become a key influencing factor in subsequent stock market trends and have attracted investors' attention.
Regarding this financial report, investors mainly focused on the effects of Ali in promoting e-commerce GMV growth through low price strategies, changes in China's retail customer management (CMR) gap, ways to increase shareholder returns, and company share repurchase and dividend payment guidelines.
The low price strategy is beginning to bear fruit, and Taotian Group's GMV growth rate has been restored
Many agencies generally expect that due to the gradual recovery of e-commerce and the company's continued promotion of price power and user experience optimization strategies, Ali's online GMV is expected to achieve healthy growth this season, and the main business value will remain stable. In addition, Ali's international business and cloud business continue to gain strength and have great potential for growth.
Over the past few months, from Wu Yongming also being the CEO of Taotian Group and carrying out a “big blood exchange” for the management of Taotian Group, to recently talking about Alibaba Group Chairman Cai Chongxin, and Alibaba founder Ma Yun, publicly discussing the strategic mistakes of Taobao and Tmall over the past few years and conveying support for the new management changes, “Taobao and Tmall will change” and “Alibaba's strategic focus is focused on Taotian” has clearly become the consensus of Alibaba's core decision makers.
CICC believes that thanks to the company's strategic direction of establishing “scale and market share as the primary goal” and the good performance of online consumption since the beginning of the year, Ali's GMV growth rate this season has gradually caught up with the year-on-year growth rate of online retail sales. It will increase 6% year on year, and customer management revenue (CMR) will increase 3.5% year on year.
On the other hand, due to AliExpress's continued high growth, preparations for the 10 billion subsidized brand to go overseas have accelerated. Alibaba's retail revenue is expected to increase by about 45% year-on-year to 20.5 billion yuan this quarter, with an adjusted EBITA loss of about 4.1 billion yuan; Alibaba Cloud's revenue is expected to increase 4% year-on-year to 25.7 billion yuan, and the adjusted EBITA is about 1.6 billion yuan. Guoxin Securities pointed out that the main reason for the decline in Ali's adjusted EBITA profit margin was the increase in investment in Taotian, international digital commerce, and Gaode businesses, the year-on-year decline in profit margins, and the total one-time bonus expenses given to employees by Cainiao after suspending its listing was about 1 billion yuan, all included in the March quarter.
$125 billion! Ali became the Chinese internet company with the most buy-back efforts
In the financial year ending March 31, 2024, Alibaba repurchased a total of 1,249 billion shares of common stock (equivalent to 156 million American Depositary Shares) at a total price of US$12.5 billion, making it the most aggressive Chinese internet company to repurchase in the past fiscal year.
Currently, Ali's share repurchase plan still has a repurchase limit of US$31.9 billion, which is valid until March 2027. The company continues to strengthen shareholder returns, which is expected to further improve sentiment.
According to 86 Research's total shareholder return (Total Share HolderYield, dividend+dividend/market value) calculation results, in the past fiscal year, Alibaba's total shareholder return (Total Share HolderYield) was 6.5% and the stock buyback ratio (Buyback Ratio) was 5.2%, leading all large internet equity peers with a market capitalization of over 20 billion US dollars.
The agency believes that companies that continue to implement active dividend payment and repurchase policies are more attractive to value investors. This is a renewed commitment to shareholder value, proof of the company's financial health, and an important reference for investors in stock selection.
CMB International expects that although increased investment in the business puts pressure on profit margin expansion, the bank remains optimistic about Alibaba's long-term growth potential. Ali is committed to improving shareholder returns by reducing losses in non-core businesses, strengthening stock repurchases, and increasing dividend payments, which supports short-term valuations. Measures to promote the Group's business integration and strategic collaboration may provide long-term value.
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