To The Moon

I. Personal Insights Summary:

1. Alibaba's recent performance has been lackluster, particularly with its core retail segment, led by Taobao, showing weak performance. Despite continuous growth in international business, other segments have not demonstrated significant growth.

2. Alibaba Cloud, as the most prominent non-retail segment, performed reasonably well this quarter, significantly improving profitability despite modest revenue growth.

3. Alibaba's stock has been weak over the past two years, closely tied to its overall underwhelming performance. Even amid the recent rebound in Chinese stocks, Alibaba has lagged behind the market. Overall, I don't consider Alibaba a compelling investment at present.

II. Financial Analysis: Revenue Growth Rebounds, Profitability Weakens Overall

In terms of revenue, Alibaba achieved revenue of ¥2218.74 billion, a year-on-year increase of 6.6%, slightly better than the market's previous expectation of ¥2198 billion, and a slight rebound from the previous quarter. Over the past few quarters, with core e-commerce giants such as Taobao and JD.com performing mediocrely, Alibaba's growth has been limited.

In terms of profitability, Alibaba recorded a net profit of ¥9.19 billion this quarter, a 96% year-on-year decrease. Adjusted net profit was ¥24.418 billion, an 11% year-on-year decrease, weaker than market expectations. In recent quarters, Alibaba's profitability has weakened, mainly due to the failure of some loss-making businesses to narrow their losses. The significant difference between these two profit figures is due to the impact of operating external factors such as investment value, amortization of intangible assets, and impairment of goodwill.

III. Operational Analysis: Decline in Taobao's Profitability, Continuous High Growth in International Business, Strong Profitability of Alibaba Cloud

In terms of Alibaba's current structure, it is mainly divided into six major business segments: Taobao Group, International Business Group, Local Services Group, Cainiao Group, Alibaba Cloud Group, and Digital Media and Entertainment Group. In this quarter's specific business analysis, Taobao Group, International Business Group, and Alibaba Cloud, as the three most critical segments, are highlighted.

1. Decline in Taobao Group's Profitability: Taobao Group's revenue this quarter reached ¥932.2 billion, a 4% year-on-year increase. However, profitability declined this quarter, with adjusted EBITA decreasing by 1% year-on-year.

2. Continuous High Growth in International Business: International business continued to show impressive growth, with revenue reaching ¥274.5 billion this quarter, a 45% year-on-year increase, the fastest-growing segment among all major businesses.

3. Strong Profitability of Alibaba Cloud: Alibaba Cloud achieved revenue of ¥25.6 billion, a 3% year-on-year increase. Despite modest revenue growth, Alibaba Cloud's profitability significantly improved. Adjusted EBITA reached ¥14.32 billion, a 45% year-on-year increase, showcasing remarkable cost control, operational efficiency, and product competitiveness.

Alibaba Cloud's success is not immediate but built on a deep understanding and precise grasp of the cloud computing market, coupled with continuous investment in technology innovation and optimization. Looking ahead, whether Alibaba Cloud can maintain its leading position in the industry and compete closely with top American tech companies in the future cloud computing market will require even greater effort.

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