24 February Alibaba released its fourth quarter 2021 financial report.
Key indicators of the company and expectations of analysts:
- revenue - 242.6 billion yuan (38,1 billion dollars), expectations - 246.4 billion yuan;
- adjusted earnings per ADR - 16.9 yuan (2,6 $), waiting - 16.2 yuan.
Here's what impacted each of these metrics.
Alibaba's revenue increased by 10% — this is the worst result since entering the US stock exchange in 2014.
And here's how sales have changed in each of the segments.
China commerce - electronic platforms and hypermarkets in China - $ 27 billion (+7%).
There are two key areas in this segment.
Customer management - retail sites Taobao and Tmall - $15.7 billion (−1%). This is the main business, which gives about 40% proceeds. Here the company earns on delivery, advertising and commissions, that sellers pay. Due to high competition and the slowdown of the entire industry, this income has fallen., although a year ago it showed growth by 20%.
Direct sales - hypermarkets - $10.7 billion (+21%). Second largest business, which gives about 30% proceeds. The company has been developing the direction of hypermarkets since 2020. Then she bought the Sun Art network from Auchan.
International commerce — electronic platforms in other countries — $2.6 billion (+18%).
Local consumer service - food delivery and apps for travelers - $1.9 billion (+27%).
Cainiao — logistics services — $2.1 billion (+15%).
Cloud — cloud business — $3.1 billion (+20%).
digital medium - gaming, audio- and video services — $1.3 billion (+0%).
Innovation initiatives — experimental areas — $0.2 billion (+63%).
Share of total revenue by segments
|Local consumer service||5%|
Alibaba's net profit fell by 74%, up to $3.2 billion. The indicator was affected by various non-operating and non-monetary items. For example, the company earned less from investing in stocks. It also revalued intangible assets and wrote off $3.9 billion of goodwill.
To exclude the influence of such articles, Alibaba calculates adjusted EBITA. This is adjusted earnings before interest., taxes and depreciation.
Even with adjusted adjustments, EBITA fell by 27%, up to 7 billion dollars. The company explains this result by investing in its numerous services.. As a result, adjusted EBITA margin fell from 28 to 18%.
But Alibaba's margins have fallen not only because of investment. The company develops hypermarket chains. This is a low margin business., which brings in a lot of money, but little profit. And if the share of this business in total revenue continues to grow, profitability will continue to fall.
Adjusted EBITA segments, million dollars
|Local consumer service||−783|
Alibaba stock plunged 9% immediately after the report, to 100 $, but later almost completely recovered. In total, by the end of the day, the paper fell to 1%, to 109 $.
Since October 2020, Alibaba shares have already fallen by 65% due to pressure from Chinese regulators. According to the company, stocks are too cheap. Therefore, Alibaba buys back its own securities. Over the past nine months, she sent $ 7.7 billion to buyback. The company plans to spend the same amount by the end of 2022..