Alibaba's self transformation continues to advance.
On the evening of November 16th, Alibaba released the latest news on strategic adjustments: given various uncertain factors, it will no longer promote the complete separation of the Cloud Intelligence Group; As of now, Cainiao has submitted its listing application to the Hong Kong Stock Exchange; On Taobao, Alibaba Group CEO Wu Yongming stated that Taobao will adhere to its positioning as an internet consumer platform and "does not position itself as a retail company".
In addition, Alibaba Group released its results for the second quarter of the 2024 fiscal year. According to the financial report, the revenue for the second fiscal quarter from July to September this year was 224.79 billion yuan, a year-on-year increase of 9%, with an estimated revenue of 224.1 billion yuan; Operating profit and adjusted EBITA increased by 34% and 18% year-on-year, respectively. According to the financial report, Alibaba's board of directors has approved the distribution of cash dividends for the fiscal year 2023, with a total dividend amount of approximately $2.5 billion; At the same time, Alibaba continues to implement its share repurchase plan and continuously improves shareholder returns.
Multiple businesses, latest developments
Alibaba Group CEO Wu Yongming stated that Alibaba Group's performance this quarter was stable, with multiple businesses demonstrating new momentum and vitality, and significant results in proactive self transformation.
Specifically, Alibaba's global business network construction continues to advance, with strong performance from major retail platforms such as AliExpress, Lazada, and Trendyol, driving the overall order growth of Alibaba International Digital Business Group's retail business by about 28% year-on-year and revenue growth by 73% year-on-year.
The overall orders of the local living group increased by nearly 20% year-on-year in the quarter, and the number of active consumers (AAC) continued to grow quarter on quarter. Among them, in the "home to home" scenario, the number of hungry transaction users has increased, the per capita purchase frequency has increased, and both catering and non meal delivery orders have achieved double-digit growth year-on-year; In the 'to destination' scenario, the peak number of daily active users in Gaode exceeded 280 million, setting a new historical high.
The recovery of offline scenarios and strong consumer demand have driven rapid growth in the entertainment and tourism markets. This quarter, the GMV (total commodity trading volume) of Damai Network achieved a three-digit growth. In September 2023, Quark DAU (daily active users) increased by over 35% year-on-year, while Xianyu DAU increased by over 20% year-on-year, meeting the needs of young users in areas such as learning, work, and interests.
Alibaba Group CEO Wu Yongming stated on the 16th financial report analyst conference call that Taobao should firmly establish a comprehensive platform to meet the multi-level needs of the largest consumer group and increase purchase frequency. In the strategic cycle for the next three years, Taobao Tmall will further clarify its business priority - user first. Meanwhile, Wu Yongming also made it clear that Taobao will adhere to its positioning as an internet consumer platform and "will not position itself as a retail company". Taobao will prioritize the frequency of user purchases over GMV as the most critical goal of platform operations. In addition, Taobao will implement a multi-level market strategy and price power strategy within an app. Wu Yongming believes that as a super app, Taobao has the ability to accommodate multiple product layers and value propositions from brand to white label. Through the iteration of AI technology and operational models, Taobao will be built into a consumer app that includes diversified markets, and price power will be the core strategy for penetrating all levels of products.
As of September 30th, Cainiao's revenue increased by 25% year-on-year to 22.823 billion yuan (3.128 billion US dollars), mainly driven by revenue from cross-border logistics fulfillment solutions. In this quarter, Cainiao's adjusted EBITA (before interest, tax, depreciation and amortization) was 906 million yuan, a year-on-year increase of 625%.
Alibaba Cloud Incomplete Split
According to the latest disclosure in Alibaba Group's financial report, due to various uncertain factors, the complete separation of Cloud Intelligence Group will no longer be promoted. At the same time, Alibaba will resolutely increase its continuous strategic investment in Alibaba Cloud, ensuring that Alibaba Cloud focuses on the development strategy of "AI+cloud computing" and creates a technologically leading cloud computing service in the AI era.
At the end of March this year, Alibaba Group launched an organizational transformation of "1+6+N", and Alibaba Cloud Intelligence became one of the six major business groups. Previously, Alibaba had planned to completely spin off Alibaba Cloud Intelligence Group from Alibaba Group and complete its listing in the next 12 months.
The recent expansion of restrictions on the export of advanced computing chips in the United States has brought uncertainty to the prospects of Cloud Intelligence Group. We believe that a complete spin off of Cloud Intelligence Group may not enhance shareholder value as originally envisioned. Therefore, we have decided not to promote a complete spin off of Cloud Intelligence Group, but will instead face an uncertain environment and focus on establishing a sustainable growth model for Cloud Intelligence Group. "Alibaba's latest financial report shows.
Alibaba also stated that facing the AI era, Alibaba Cloud needs long-term strategic investment more than ever. Alibaba will resolutely increase its investment in Alibaba Cloud, allowing it to focus on the "AI+cloud computing" development strategy without any distractions, and minimizing the adverse impact of uncertain factors on future development.
The dual wheel drive of "AI+cloud computing" is the underlying capability of Alibaba Cloud to face the future and support AI infrastructure services. In the AI era, Alibaba aims to become an open technology platform enterprise that serves AI innovation throughout society, "said Wu Yongming.
In addition, some investors have asked whether Alibaba Cloud's listing plan will be suspended or permanently cancelled, and whether Alibaba Cloud's spin off will be reconsidered after the market situation changes. Cai Chongxin, Chairman of the Alibaba Group Board of Directors, did not provide a clear answer. Cai Chongxin stated that at that time, he wanted to achieve a complete separation of Alibaba Cloud in order to demonstrate the true value of the business through the so-called financial engineering method. At that time, Alibaba Cloud was in a predictable environment and the entire operation could be transparent, demonstrating the growth trend of the business to investors, Nowadays, the overall environment has changed, and we are no longer using financial engineering, but through further investment to demonstrate the value of cloud business. In the future, we will seek to increase its growth, including revenue and profits
Announced dividend payout of approximately $2.5 billion
On the evening of November 16th, another announcement showed that Alibaba's board of directors had approved the distribution of cash dividends for the 2023 fiscal year, with a total dividend amount of approximately $2.5 billion; At the same time, Alibaba continues to implement its share repurchase plan, continuously improving shareholder returns, and demonstrating its firm confidence in business fundamentals and future development.
This annual dividend distribution is to be paid in US dollars to holders of ordinary shares and American depositary shares registered at the close of December 21, 2023, Hong Kong time and New York time, with amounts of $0.125 per ordinary share or $1.00 per American depositary share, respectively.
Alibaba stated that in the future, Alibaba will continue to review and determine the dividend amount annually based on factors such as business fundamentals and capital requirements.
It is understood that Alibaba will continue to implement its share repurchase plan this quarter. In the quarter ended September 30, 2023, Alibaba repurchased approximately 18.6 million ADSs (equivalent to approximately 148.4 million ordinary shares) for approximately $1.7 billion under its share repurchase program. Under the current share repurchase plan authorized by the board of directors, Alibaba still has a repurchase limit of approximately $14.6 billion, which is valid until March 2025.
According to our capital management plan, we are prioritizing investment in technology and innovation to bring new growth to our business. We are confident in the fundamentals of our business and are pleased to announce the first annual dividend for fiscal year 2023, which is another ongoing effort to improve shareholder returns in addition to our existing share buyback plan. Alibaba Group Chief Financial Officer Xu Hong said.