BABA(09988)2024-11-29 14:44Revenue and Profit Performance - Revenue for the six months ended September 30, 2024, was RMB 479,739 million (USD 68,362 million), a 5% increase compared to RMB 458,946 million in the same period last year[16] - Operating profit for the six months ended September 30, 2024, was RMB 71,235 million (USD 10,151 million), a 6% decrease compared to RMB 76,074 million in the same period last year[11] - Adjusted EBITDA for the six months ended September 30, 2024, was RMB 98,488 million (USD 14,034 million), a 3% decrease compared to RMB 101,289 million in the same period last year[11] - Net income for the six months ended September 30, 2024, was RMB 67,569 million (USD 9,629 million), a 13% increase compared to RMB 59,696 million in the same period last year[11] - Diluted earnings per share for the six months ended September 30, 2024, was RMB 3.50 (USD 0.50), a 16% increase compared to RMB 3.01 in the same period last year[11] - The decrease in operating profit was primarily due to a reversal of equity incentive expenses of RMB 6,901 million recorded in the six months ended September 30, 2023[12] - The decrease in adjusted EBITDA was mainly due to increased investment in e-commerce business, partially offset by revenue growth and improved operational efficiency[13] - The increase in net income was primarily driven by changes in the fair value of equity investments and a reduction in investment impairments, partially offset by a decrease in operating profit and an increase in net exchange losses[13] - Operating profit for the six months ended September 30, 2024, was RMB 71,235 million (USD 10,151 million), representing 15% of revenue, a 6% decrease year-over-year due to the reversal of equity incentive expenses in 2023[57] - Adjusted EBITDA for the six months ended September 30, 2024, was RMB 98,488 million (USD 14,034 million), a 3% decrease year-over-year, primarily due to increased investment in e-commerce[58] - Net profit for the six months ended September 30, 2024, was RMB 67,569 million (USD 9,629 million), up from RMB 59,696 million in the same period of 2023, driven by mark-to-market gains on equity investments[66] - Non-GAAP net profit for the six months ended September 30, 2024, was RMB 77,209 million (USD 11,002 million), a 9% decrease year-over-year[66] - Diluted earnings per ADS for the six months ended September 30, 2024, were RMB 28.00 (USD 3.99), up from RMB 24.08 in the same period of 2023[69] - Net profit for the six months ended September 30, 2024, was RMB 67,569 million (USD 9,629 million), compared to RMB 59,696 million for the same period in 2023[77] - Adjusted EBITA for the six months ended September 30, 2024, was RMB 85,596 million (USD 12,197 million), compared to RMB 88,216 million for the same period in 2023[77] - Adjusted EBITDA for the six months ended September 30, 2024, was RMB 98,488 million (USD 14,034 million), compared to RMB 101,289 million for the same period in 2023[77] - Non-GAAP net profit for the six months ended September 30, 2024, was RMB 77,209 million (USD 11,002 million), compared to RMB 85,110 million for the same period in 2023[79] - Diluted earnings per share (EPS) for the six months ended September 30, 2024, was RMB 3.50 (USD 0.50), compared to RMB 3.01 for the same period in 2023[83] - Non-GAAP diluted EPS for the six months ended September 30, 2024, was RMB 3.94 (USD 0.56), compared to RMB 4.13 for the same period in 2023[83] Segment Performance - Taotian Group's China retail commerce revenue decreased by 1% YoY to RMB 200,429 million (USD 28,561 million), driven by an 8% decline in direct sales revenue[22][24] - Cloud Intelligence Group revenue increased by 7% YoY to RMB 56,159 million (USD 8,003 million), driven by double-digit growth in public cloud products, including AI-related products[27] - Alibaba International Digital Commerce Group's international retail commerce revenue grew 37% YoY to RMB 49,309 million (USD 7,026 million), driven by growth in AliExpress Choice and Trendyol[29] - Cainiao Group revenue increased by 12% YoY to RMB 51,458 million (USD 7,333 million), primarily driven by growth in cross-border logistics fulfillment solutions[33] - Taotian Group's adjusted EBITA decreased by 3% YoY to RMB 93,400 million (USD 13,309 million), mainly due to increased investments in user experience[26] - Cloud Intelligence Group's adjusted EBITA surged 115% YoY to RMB 4,998 million (USD 712 million), driven by a shift to higher-margin public cloud products and improved operational efficiency[28] - Alibaba International Digital Commerce Group's adjusted EBITA loss widened to RMB 6,611 million (USD 942 million), primarily due to increased investments in AliExpress and Trendyol's cross-border businesses[32] - Cainiao Group's adjusted EBITA decreased by 62% YoY to RMB 673 million (USD 96 million), mainly due to increased investments in cross-border logistics fulfillment solutions[34] - Local生活 Group revenue increased by 13% YoY to RMB 33,954 million (USD 4,838 million)[20] - All other segments revenue increased by 6% YoY to RMB 99,179 million (USD 14,133 million), including businesses like Freshippo, Alibaba Health, and Fliggy[20][18] - Local Life Group revenue increased by 13% to RMB 33,954 million (USD 4,838 million) for the six months ended September 30, 2024, driven by order growth in Amap and Ele.me, as well as increased marketing service revenue[35] - Local Life Group's adjusted EBITA loss narrowed to RMB 777 million (USD 111 million) for the six months ended September 30, 2024, compared to a loss of RMB 4,546 million in the same period last year, due to improved operational efficiency and scale expansion[36] - Digital Media and Entertainment Group revenue grew by 1% to RMB 11,275 million (USD 1,607 million) for the six months ended September 30, 2024[37] - Digital Media and Entertainment Group's adjusted EBITA loss widened to RMB 281 million (USD 40 million) for the six months ended September 30, 2024, compared to a loss of RMB 138 million in the same period last year[39] - All Other segments revenue increased by 6% to RMB 99,179 million (USD 14,133 million) for the six months ended September 30, 2024, primarily driven by growth in retail commerce, including Hema and AliHealth[40] - All Other segments' adjusted EBITA loss narrowed to RMB 2,845 million (USD 405 million) for the six months ended September 30, 2024, compared to a loss of RMB 3,170 million in the same period last year[41] Expenses and Costs - Operating costs for the six months ended September 30, 2024, were RMB 290,135 million (USD 41,344 million), accounting for 60.5% of revenue, down from 61.4% in the same period last year[47] - Product development expenses for the six months ended September 30, 2024, were RMB 27,555 million (USD 3,927 million), accounting for 5.7% of revenue, up from 5.4% in the same period last year[48] - Sales and marketing expenses for the six months ended September 30, 2024, were RMB 65,167 million (USD 9,286 million), accounting for 13.6% of revenue, up from 11.4% in the same period last year, primarily due to increased investment in e-commerce business[48] - Share-based compensation expenses for the six months ended September 30, 2024, were RMB 8,277 million (USD 1,179 million), up from RMB 5,201 million in the same period last year[49] - Intangible assets amortization and impairment decreased by 30% to RMB 3,441 million (USD 490 million) for the six months ended September 30, 2024, compared to RMB 4,910 million in the same period of 2023[56] Cash Flow and Investments - Interest income and net investment gains for the six months ended September 30, 2024, were RMB 17,129 million (USD 2,441 million), compared to a net loss of RMB 762 million in the same period of 2023[60] - Cash, cash equivalents, short-term investments, and other financial investments totaled RMB 554,378 million (USD 78,998 million) as of September 30, 2024, down from RMB 617,230 million as of March 31, 2024, due to share repurchases and dividend payments[70] - Free cash flow for the six months ended September 30, 2024, was RMB 31,107 million (USD 4,433 million), a 63% decrease year-over-year, primarily due to investments in Alibaba Cloud infrastructure[71] - Net cash used in investing activities for the six months ended September 30, 2024, was RMB 34,865 million (USD 4,968 million), primarily due to an increase in other financial investments of RMB 113,387 million (USD 16,158 million), capital expenditures of RMB 29,585 million (USD 4,216 million), and cash outflows for investments and acquisitions of RMB 5,807 million (USD 827 million), partially offset by a decrease in short-term investments of RMB 105,470 million (USD 15,029 million) and cash inflows from the disposal of investments of RMB 6,509 million (USD 928 million)[72] - Net cash used in financing activities for the six months ended September 30, 2024, was RMB 86,364 million (USD 12,307 million), mainly due to share repurchases of RMB 72,889 million (USD 10,387 million), dividend payments of RMB 29,022 million (USD 4,136 million), and cash outflows for acquiring additional equity in non-wholly owned subsidiaries of RMB 19,947 million (USD 2,842 million), partially offset by net proceeds from convertible unsecured senior notes and capped call transactions of RMB 31,065 million (USD 4,427 million)[74] - Free cash flow for the six months ended September 30, 2024, was RMB 31,107 million (USD 4,433 million), compared to RMB 84,309 million for the same period in 2023[86] - Operating cash flow for the six months ended September 30, 2024, was RMB 65,074 million (USD 9,273 million), compared to RMB 94,537 million in the same period in 2023[96] - The company issued USD 5 billion in convertible notes in May 2024 and USD 2.65 billion in fixed-rate notes in November 2024, along with RMB 17 billion in RMB-denominated notes[97] - The company's debt-to-Adjusted EBITDA ratio increased from 0.89 as of March 31, 2024, to 1.07 as of September 30, 2024[97] - Ant Group equity stake is 33% on a fully diluted basis as of September 30, 2024, with dividends received totaling RMB 2,630 million (USD 375 million) in the six months ended September 30, 2024[98] - No other significant investments held as of September 30, 2024[99] - Completed conversion of RMB 400 million convertible loan into approximately 6% additional equity in Shenzhen Disifang Information Technology Co., Ltd., making it a consolidated subsidiary in October 2024[101] - Capital expenditures totaled RMB 29,585 million (USD 4,216 million) for the six months ended September 30, 2024, compared to RMB 12,077 million in the same period in 2023[107] - Capital expenditure commitments amounted to RMB 23,997 million (USD 3,420 million) as of September 30, 2024, up from RMB 18,372 million as of March 31, 2024[107] - Assets pledged as collateral for bank loans had a book value of RMB 27,767 million as of September 30, 2024, down from RMB 34,056 million as of March 31, 2024[103] - No significant contingent liabilities as of September 30, 2024[105] - No significant post-reporting period events affecting the company since September 30, 2024[110] Corporate Governance and Leadership - Wu Yongming has been the CEO and Director of the company since September 2023, and also serves as the Chairman and CEO of the Cloud Intelligence Group since the same period[118] - J. Michael Evans has been the President of the company since August 2015 and a Director since September 2014, with extensive experience at Goldman Sachs[120] - Maggie Wu has been a Director since September 2020 and was the CFO of Alibaba Group from May 2013 to March 2022[121] - Jerry Yang has been a Director since September 2024 and is a founding partner of AME Cloud Ventures, with a background as co-founder of Yahoo[122] - Wan Ling Martello has been a Director since September 2015 and is a founding partner of BayPine, with previous roles at Nestlé and Walmart[123] - Shan Weijian has been a Director since March 2022 and is the Executive Chairman and co-founder of PAG, with a background in investment banking and academia[125] - Lee Yuen Lien has been a Director since August 2022 and is the Executive Chairman of Hysan Development Company and an independent non-executive director of HSBC[126] - The company's board has established several committees including Audit, Compensation, Nomination and Corporate Governance, Sustainability, Compliance and Risk, and Capital Management Committees[130] - The Audit Committee is chaired by Mr. Ng Kong Ping and includes Ms. Wan Ling Martello and Mr. Shan Weijian[131] - The Compensation Committee is chaired by Mr. Jerry Yang and includes Mr. Ng Kong Ping and Mr. Kabir Misra[132] - The Nomination and Corporate Governance Committee is chaired by Ms. Lee Yuen Lien and includes Mr. Jerry Yang[133] - The Sustainability Committee is chaired by Mr. Jerry Yang and includes Mr. Joseph Tsai and Ms. Maggie Wu[134] - The Compliance and Risk Committee is chaired by Ms. Lee Yuen Lien and includes Mr. Ng Kong Ping, Mr. Kabir Misra, and Mr. J. Michael Evans[135] - The Capital Management Committee is chaired by Mr. Joseph Tsai and includes Mr. Yongming Wu, Mr. J. Michael Evans, and Ms. Maggie Wu[136] - Mr. Joseph Tsai holds approximately 1.44% of the company's shares through various entities and trusts[140] - Mr. Yongming Wu holds approximately 0.16% of the company's shares through direct ownership and trusts[140] - Mr. J. Michael Evans holds approximately 0.10% of the company's shares directly[140] - Total issued shares as of September 30, 2024, are 19,159,821,492, including repurchased but not yet canceled shares[143] - JPMorgan Chase & Co. holds 849,539,881 shares (long position) and 681,445,750 shares (short position), representing 4.43% and 3.56% of total shares respectively[146] - Shiodome Project 17 GK holds 2,195,000,000 shares (long position) and 2,195,000,000 shares (short position), representing 11.46% of total shares each[146] - SoftBank Group Corp. holds 2,293,607,896 shares (long position) and 2,293,605,600 shares (short position), representing 11.97% of total shares each[146] - Goldman Sachs holds 982,509,304 shares (long position) and 822,048,311 shares (short position), representing 5.13% and 4.29% of total shares respectively[146] - JPMorgan Chase & Co. indirectly holds 39,177,042 shares (long position) and 71,377,100 shares (short position) through listed derivatives with physical settlement[148] - Shiodome Project 17 GK indirectly holds 2,195,000,000 shares (short position) through non-listed derivatives with cash or physical settlement[150] - SoftBank Group Corp. indirectly holds 2,293,605,600 shares (short position) through non-listed derivatives with physical settlement[150] - Goldman Sachs holds 338,899,950 shares (long position) and 327,796,944 shares (short position) through physically settled listed derivatives[151] - The company's 2014 equity incentive plan expired on September 18, 2024, with no further grants to be made under this plan[154] - A total of 93,627,776 shares (equivalent to 11,703,472 ADS) were granted to eligible participants during the reporting period, representing approximately 0.5% of the company's weighted average issued shares[154] - Restricted stock units (RSUs) granted to employee participants during the reporting period totaled 63,806,796 shares, with 20,920,029 shares vested and 39,289,077 shares unvested[157] - The fair value of RSUs granted on May 13, 2024, was $80.04 per share, based on the closing price of ADS on the NYSE the day before the grant date[165] - RSUs granted to directors on August 17, 2024, had a fair