• Chinese e-commerce leader Alibaba released a report for the 4th fiscal quarter of 2022.
  • The company’s revenue increased by 8.9% YoY to RMB 204.1 billion, adj.
  • EBITDA decreased by 21.8% to RMB 23.4 billion.
  • Adjusted net income on ADS fell 23.0% YoY to RMB 8.0.

Alibaba’s revenue was 2.3% above our expectations, adj. EPS – by 10.4%, and adj. EBITDA matched them. The company’s earnings outperformed online retail sales in China, which grew only 6.6% year on year. At the same time, we note that Alibaba’s revenue grew by 19% in the whole financial year, which was expected to be slightly less than the company’s guide, which assumed growth of 20-23%.

The main positive factor in Alibaba’s reporting was the continued growth of the customer base. The company was able to meet its goal of reaching 1 billion active customers in China. However, EBITDA and net income continue to be impacted by increased customer acquisition spending and investment in key growth areas, including Taobao Deals, Taocaicai,, and Lazada. We note that in this quarter, the growth rate of revenue from the cloud computing segment slowed down to 12.5% ​​y/y, which, according to the company, is associated with the departure of one large client, which was not directly related to the quality of services provided.


Alibaba’s office

Alibaba: key financial indicators for 4 fin. quarter 2022 (billion RMB)

Ratio4 fin. q 20224 fin.q 2021chg.,%
Cloud computing19,016,912,5%
EBITDA adjusted23,429,9-21,8%
EBITDA margin11,5%16,0%-4,5 п.п.
Net profit on ADS adj.8,010,3-23,0%
Share in profit of Ant Group7,37,21,3%
Free cash flow-15,1-0,7N/A
Number of buyers in China per year, million100489112,7%


Alibaba’s office

In our view, the report is moderately optimistic for the shares of the Chinese Internet giant. Revenue growth remained low but managed to beat our and the market’s low expectations. Against the background of a series of lockdowns in China, the next quarter for Alibaba will inevitably be weaker than the current one. However, further, we expect the company’s financial results to return to a growth trajectory on the back of relatively loose fiscal and monetary policies in China and a possible easing of regulatory pressure on technology companies. However, with additional buyback support, Alibaba shares continue to trade near all-time lows on forwarding P/E and EV/EBITDA valuations. Against this backdrop, we remain optimistic about Alibaba shares.

Our recommendation for Alibaba shares is currently under review.

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