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Alibaba - Headwinds still there

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JP_mykayaplus wrote a column · May 18, 2023 09:18
Alibaba - Headwinds still there
A day after Tencent's results, we now look at $Alibaba(BABA.US)$ $BABA-SW(09988.HK)$.
All I can say from big picture, is that Alibaba is facing a different set of challenge.
Where Tencent has swiftly shown recovery and improvements, Baba's struggles are different.
Here are some notes to take note of.
1. Total revenue is up 2% YoY only
Source: Alibaba FY'23 results
Source: Alibaba FY'23 results
Although there are bright growth sparks for International commerce, local consumer services, and Cainiao, it was all offset by a drop in Baba's China commerce.
The e-commerce space is fierce and saturated in China. Baba bore the brunt as
2. International commerce is still negative EBITDA
Source: Alibaba FY'23 results
Source: Alibaba FY'23 results
While $Sea(SE.US)$'s Shopee is slowly inching toward profitability, the same cannot be observed for Lazada and its cohorts.
YoY wise, adjusted EBITA deepened to RMB 2.56 billion from RMB 2.33 billion. Adjusted EBITA margin dropped from -13% to -18%.
3. Cloud is growing nowhere
Source: Alibaba FY'23 results
Source: Alibaba FY'23 results
Once touted as the next growth catalyst of Baba, Alibaba Cloud is slowly fizzling into nothing. While most cloud providers are still reporting 20+% growth YoY, Alibaba Cloud reported a -2% drop in revenue.
Even though Adj EBITA grew, the major concern and spotlight should be on revenue shrinkage.
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