Text|Sina Technology Yang Xuemei
Edit | Han Dapeng
last night,AlibabaRelease the first financial report for the new fiscal year.
On the whole, Alibaba’s core data is relatively stable, but it is still in a regulatory transition period, and related business and financial data will still be affected. After the release of the earnings report, Alibaba’s US stocks closed down 1.35% because revenue fell short of market expectations.
In addition to the year-on-year growth of multiple businesses, Ali’s financial report has several key information points: Ali’s overall revenue is lower than market expectations, and quarterly net profit has declined; Taote’s annual active consumers exceed 190 million, and the market strategy is sinking. Significant performance; investment in innovative business is at a loss and will continue to invest in the future; Alibaba Cloud’s business revenue will be affected by the rectification of the online education industry in the future; Ant Group’s net profit has declined sequentially.
In the subsequent analyst conference call, Zhang Yong, Chairman and CEO of Alibaba Group, said that the focus of Alibaba’s incremental investment this year will be on the creation of long-term value.
Regarding the previous online transmission “Alibaba andTencent“Considering the news of mutual opening of ecosystems,” Zhang Yong said, “The social value that a large cycle between platforms can generate must be far greater than a small cycle within a single platform. “
Regulatory transition period: overall revenue is lower than expected
According to Alibaba’s first quarter financial report for the 2022 fiscal year (Alibaba’s fiscal year is not synchronized with the natural year, starting on April 1 of each year and ending on March 31 of the second year), the cycle revenue is 205.74 billion yuan ( About 31.865 billion U.S. dollars), an increase of 34% year-on-year.
If not considering mergerGaoxin RetailAs a result, revenue was 187.306 billion yuan (approximately 29.010 billion US dollars), a year-on-year increase of 22%.
Net profit was 42.835 billion yuan (about 6.634 billion U.S. dollars), compared with 47.591 billion yuan in the same period last year, down 5% year-on-year. Not in accordance with the United States General Accounting Principles (non-GAAP), net profit was 43.441 billion yuan (about 6.728 billion US dollars), an increase of 10% year-on-year, mainly due to the increase in investment income accounted for by the equity method.
In the last quarter, due to anti-monopoly penalties, Alibaba welcomed the first quarterly loss since its listing, and turned losses into profits this quarter. However, the antitrust impact continues. Alibaba’s non-GAAP free cash flow for the quarter was 20.683 billion yuan, a decrease of 43% from the same period in 2020, mainly due to the 9.114 billion yuan used to pay some antitrust fines and critical Investment in strategic areas and growth businesses has led to a decline in profitability.
In the context of anti-monopoly, Ali has repeatedly lowered the entry threshold and operating costs of platform merchants this year. At the end of the 2021 fiscal year, Alibaba Group announced that it “plans to use all incremental profits and additional capital in fiscal 2022 to support platform merchants and invest in new businesses and key strategic areas.”
In addition, the financial report shows that from January to March this year, Alibaba Group’s investment income from Ant Group was 4.494 billion yuan, a decrease from 7.182 billion yuan in the fourth quarter of 2020, reflecting the decline in Ant Group’s net profit in the first quarter of this year. Analysts said that this is mainly due to seasonal factors and the implementation of rectification measures.
At the beginning of November last year, the listing of Ant Group was suspended, and a rectification work group was established at the end of December to start formulating rectification plans and work schedules. On April 12 this year, the Ant Group issued an announcement stating that under the guidance of the financial management department, it has completed the research and formulation of the rectification plan and comprehensively benchmarked the regulatory requirements.
Alibaba currently holds a 33% stake in Ant Group. Therefore, it can be roughly estimated that the net profit of Ant Group from January to March was 13.6 billion yuan, which was a 33% decrease from the 21.76 billion yuan in the fourth quarter of 2020.
Rectification implicated: online education will affect cloud business revenue?
From the perspective of revenue composition, Ali’s revenue sources are mainly core e-commerce; cloud computing; digital media and entertainment; innovation strategies and other revenue aspects. The core e-commerce companies include the Chinese retail market (Taobao, Tmall, Taobao special edition), new retail (Hema, Taoxianda, Gaoxin retail), local life services (Are you hungry), Cainiao.com, and international retail ( Lazada and AliExpress).
Compared with the previous quarter, each business has different degrees of growth. Among them, Cainiao Network achieved a 50% revenue growth, and Cainiao’s wrapping orders increased by 63% year-on-year; the growth of Youku, Alibaba Pictures and other entertainment business revenues brought a year-on-year increase of 15% in digital media and entertainment business revenue.
In the core e-commerce sector, this quarter, the global annual active consumers of the Alibaba ecosystem were 1.18 billion, an increase of 45 million compared to the previous quarter. Among them, the Chinese market accounted for 77.3% of consumers, which was 912 million, and the overseas market accounted for 22.7. %. Compared with the ratio of 78.8% and 21.2% in the previous quarter, the proportion of consumers in the domestic market has increased. At present, the annual active consumers in the Ali ecosystem account for 63.1% of China’s total population.
In the past quarter, the e-commerce market has experienced a “618 big promotion”. Due to the increase in the number of platform paid members and the increase in the average income of paid members, Alibaba’s core e-commerce business has experienced different growth rates.
In terms of cloud business, revenue for the quarter was 16.05 billion yuan, which was lower than the 16.98 billion yuan estimated by the market. Although Alibaba Cloud has achieved profitability for the third consecutive quarter, and adjusted EBITA profit expanded to 340 million yuan, the growth rate has slowed down, and in the next quarter, revenue will also be affected by the external environment.
In the earnings conference call, Alibaba said that the impact of cloud services losing major customers will continue until the end of the fiscal year, until its international business is completely separated from Alibaba Cloud. In addition, the industry rectification of online education will also affect Alibaba Cloud’s revenue.
Innovation bottleneck: quarterly strategic investment loss of 13.9 billion yuan
In the earnings conference call, Alibaba said that this quarter’s strategic investment loss of 13.9 billion yuan was mainly used for community group buying, Taobao special edition, local life services and Lazada and other businesses. The financial report shows that Alibaba’s operating profit for the quarter decreased by 11% year-on-year.
However, even with losses, Ali’s investment in new businesses such as community business platforms, Taote and local life services has not decreased.Mainly due to the increase in users of AliChangheThe pressure on innovative business development is huge: On the one hand, the number of users isPinduoduoTo catch up, there is an urgent need to break through the growth bottleneck; on the other hand, in innovative businesses such as community group buying, several major e-commerce platforms and Internet companies are competing for the next growth point.
Ali’s goal is to drive diversified layout through multiple tracks and multiple engines to support growth, but the process is difficult, that is, it is affected by the changing environment and is also related to the group’s internal innovation capabilities.
In terms of community group buying, in July of this year, early community group buying participants living on the same journey and Shixianghui filed for bankruptcy due to mismanagement and other reasons, or fell into a crisis of empty buildings and delayed employee wages.
Another e-commerce giant Pinduoduo’s community group buying business is also continuing to invest, and has not yet seen its contribution to the business. Under many influences, the market’s confidence in community group buying has declined sharply. In the future, Ali may continue to burn money in community group buying.
For Ali, Pinduoduo,JingdongFor e-commerce enterprises, community group buying is an effective supplement to Pinduoduo’s existing business. However, in the short term, it still faces pressure and tests from the supply chain and warehousing and logistics. Whether it can become the driving force of the company’s performance growth in the future may be Unknown.
In terms of innovative business, Ali has achieved initial results in the development of sinking markets. In the matrix of Alibaba’s consumer apps, Taote (Taobao Special Edition) undertakes the task and goal of bringing incremental new users to Alibaba’s consumption ecology, especially new users in the sinking market, while satisfying the need for cost-effectiveness. The needs of the required users.
According to financial report data, Taote’s annual active consumers as of June 30 exceeded 190 million, accounting for 20.8% of the domestic annual active consumers.
In the conference call, Zhang Yong expressed his recognition of the development of the business, mentioned the effectiveness of the strategy, and said that he is building a supply chain from manufacturing to consumers, forming an industrial belt that directly connects consumers, and the origin of agricultural products directly connects the supply of consumers. Chain, this is another goal of Taote.
Regarding this year’s investment, Zhang Yong said that subsidies cannot bring long-term value to merchants or consumers. The focus of Alibaba’s incremental investment this year is to create long-term value.
Are Ali and Tencent interoperable soon?
Last month, foreign media reported a news that Alibaba and Tencent were considering opening up their ecosystems. The report pointed out that Alibaba may introduce WeChat Pay to Taobao and Tmall; and Tencent may allow Alibaba’s e-commerce information in WeChat sharing, or allowing WeChat users to use some services of Alibaba through mini programs.
As soon as the news came out, there was speculation and discussion in the market, but Alibaba and Tencent remained silent, neither denying it nor acknowledging it. Regardless, Zhang Yong’s speech released a positive signal during the Alibaba earnings conference call last night.
Zhang Yong said that if the platforms can be interconnected, it will definitely bring new reform dividends, and the result will be a win-win situation. For small and medium-sized enterprises, the removal of external chain blocking can reduce traffic costs, help reduce operating costs, and bring better operating convenience; for consumers, it will help improve the convenience of life. “The social value that a large cycle between platforms can generate must be far greater than a small cycle within a single platform.”
In addition, Zhang Yong also specifically mentioned, “We have noticed that the Ministry of Industry and Information Technology recently launched a special rectification action for the Internet industry. The key rectification issues include malicious blocking of website links and interference with the operation of other enterprise products or services. We think it is very necessary. We In accordance with government requirements, we will work with other platforms to face the future and meet each other halfway.”
You know, Taobao Tmall’s product links have been blocked for sharing in WeChat friends, WeChat groups, and Moments. To share good things with friends, you can only copy a string of “Martian text” and then open Taobao, which is cumbersome. Greatly affect the user experience. Not only Taobao and Tmall, but users also struggled to block WeChat for a long time.
As for the interoperability, who is better off by Alibaba and Tencent may depend on the specific interoperability content.
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