Has Alibaba lost its edge? 🤔🤔
Alibaba's stock price has suffered significantly in recent years, resulting in a painful 50% loss for shareholders who have held the stock for the past five years. $Alibaba(BABA.US$
Additionally, investors were shocked by the recent earnings report, which showed a net loss of $22 billion RMB for the three-month period ending September 30th, 2022. These losses have led many to question whether Alibaba has lost its competitive edge. 😖😖
However, upon closer inspection, Alibaba remains a highly profitable company. Its total revenue has grown by 3% year-over-year, reaching $207 billion RMB. Most aspects of the business have seen consistent growth, with the exception of China Commerce, which experienced a 1% drop in revenue.
This could be primarily attributed to China's 0-Covid policy, which has severely impacted logistics and the supply chain.
Alibaba attributed the shift from profit to loss to "an increase in net losses resulting from the decline in market prices of equity investments in publicly-traded companies and a reduction in the share of equity method investees' results." The substantial drop in valuation was mainly linked to its controversial financial unit, Ant Financial. 🐜
If you disregard the investment losses, and look at Alibaba's preferred non-GAAP reporting method, the company would have achieved a 19% year-on-year growth in net profit, totaling $33.8 billion RMB or $4.75 billion. 🤗
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