Slowing Growth in the Core Commerce Business Hurt Alibaba (BABA) in Q4

Core Insights - SGA's Emerging Markets Growth Strategy experienced a divergence from the market in Q4 2025, with the portfolio returning 0.8% (Gross) and 0.6% (Net), compared to MSCI EM Net TR Index return of 4.7% and MSCI EM Growth Net TR Index return of 3.3% [1] - For the full year 2025, the portfolio achieved returns of 23.8% (Gross) and 22.8% (Net), lagging behind the indexes which returned 33.6% and 34.3% respectively [1] - The portfolio anticipates annual revenue growth of 13% and earnings growth of 16% over the next three years [1] Company Focus: Alibaba Group Holding Limited - Alibaba Group Holding Limited (NYSE:BABA) was highlighted as a detractor in Q4 2025 due to mixed fiscal Q2 results, with core commerce facing slowing growth and profit pressure [3] - The company reported a one-month return of -3.87% and a 12-month increase of 37.46%, with a market capitalization of $392.286 billion as of February 11, 2026 [2] - Alibaba's cloud revenue growth accelerated, and management's strategy in quick commerce aims to enhance market share despite initial profit pressures, leveraging its user base and ecosystem assets [3] - Ongoing investments in AI and cloud infrastructure are expected to increase, with a focus on sustaining market share in quick commerce and food delivery services [3] - The company is projected to achieve high-teens earnings growth over the next three years, supported by its scale and innovation in China's digital economy [3]