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Alibaba Reports Strong Q2 Results and Dividend

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5.0

Andrew R. Michaud

• November 16, 2023

Alibaba Group Holding Ltd. delivered solid performance in the latest quarter, meeting revenue expectations and revealing an annual dividend. However, the Chinese e-commerce giant's shares experienced a 6% fall in Thursday's premarket action.

Strong Financials

Alibaba achieved a net income of RMB27.7 billion ($3.8 billion) in the fiscal second quarter. This translates to RMB10.77 per American depositary share, a significant improvement from the net loss of RMB20.6 billion (RMB7.77 per ADS) reported in the year-prior period. On an adjusted basis, the company recorded earnings per share of RMB15.63, surpassing the FactSet consensus of RMB15.28.

Robust Revenue Growth

Revenues for Alibaba rose to RMB224.8 billion from RMB207.2 billion, in line with expectations set by the FactSet consensus of RMB224.5 billion. The company's Taobao and Tmall e-commerce platforms contributed significantly to total revenue, generating RMB97.7 billion, a 4% increase compared to the previous year.

Strong Cloud-Intelligence Performance

Alibaba's cloud-intelligence group witnessed a 2% bump in revenue, amounting to RMB27.6 billion. Despite previous plans to spin off the cloud unit, the company decided against it, citing doubts about its potential to enhance shareholder value significantly.

Strategic Reorganization Pays Off

Alibaba's Chief Executive Eddie Wu expressed satisfaction with the company's results, highlighting "renewed momentum and energy across multiple businesses" due to a strategic reorganization effort.

Focus on Technology and Innovation Investment

Chief Financial Officer Toby Xu emphasized Alibaba's commitment to investing in technology and innovation to drive new growth under their capital management plan. This aligns with the company's vision for prioritizing long-term gains.

Dividend Announcement

Alibaba's board of directors approved an annual cash dividend of $1 per ADS for fiscal 2023. The dividend will be payable to shareholders as of the close of trading on December 21, and the company anticipates a total distribution of approximately $2.5 billion.

Going forward, Alibaba will regularly review and determine dividend amounts based on factors such as business fundamentals, capital requirements, and other relevant considerations.

Alibaba's Q2 results and dividend announcement demonstrate the company's commitment to continued growth and shareholder value. With robust financials and strategic reorganization efforts, Alibaba aims to drive innovation and capitalize on emerging opportunities in the e-commerce landscape.