Alibaba’s September Quarter 2022 Results

Project Freedom Alibaba

An overview of Alibaba’s September Quarter 2022 segment results:

China Commerce Retail Revenue:
Revenue in the quarter decreased by 1% to RMB 131,222 million compared to RMB 131,946 million in the same quarter of 2021.
Direct sales and other revenue under China’s commerce retail business in the quarter that ended September 2022 was RMB 64,725 million, which was an increase of 6% compared to RMB 60,815 million in the same quarter of 2021.

China Commerce Wholesale Revenue:
Revenue ended September Quarter 2022 was RMB 4,209 million, which was an increase of 1% compared to RMB 4,174 million in the quarter of 2021.

International Commerce Retail Revenue:
Revenue from international commerce retail business in the quarter that ended September 2022 was RMB 10,738 million, an increase of 3% compared to RMB 10,375 million in the same quarter of 2021. AliExpress is facing declining orders due to the depreciation of the Euro against US dollars.
International Commerce Wholesale revenue:
Revenue from international commerce wholesale business in the quarter that ended September 2022 was RMB 5,009 million, an increase of 6% compared to RMB 4,717 m.

Local Consumer Services Revenue:
Revenue from Local consumer services which includes “To-Home” and “To-Destination” businesses such as Ele.me, Amap, and Fliggy, was RMB 13,073 million in the quarter of September 2022, an increase of 21% compared to RMB 10,806 million in the same quarter 2021.

Cainiao is the one-stop-shop logistics services and supply chain management solutions was RMB 13,367 million in September 2022, an increase of 36% compared to RMB 9,846 million in the same quarter of 2021.

Cloud segment revenue was RMB 20,757 million in the quarter that ended September 2022, an increase of 4% compared to RMB 20,007 million in the same quarter of 2021.

Digital media and entertainment in the quarter that ended September 2022 was RMB 8,392 million an increase of 4% compared to RMB 8,081 million in the same quarter of 2021. There was a narrowing loss from Youku and improved quality content that resulted in an increase in revenue from Alibaba Pictures.

The innovation Initiatives and Others segment revenue was RMB 409 million in the quarter that ended September 2022, a decrease of 45% to RMB 738 million in the same quarter of 2021.

A slowdown in Alibaba’s overall revenue is expected, and China’s consumer confidence index is at a historical low. The consumer confidence index is lower than during the peak of the COVID-19 pandemic in 2020. This is due to the constant implementation of movement restrictions and structural risks within the Chinese economy. The zero-COVID policy put millions in lockdown, causing China to face more challenges ahead.

We are still estimating Alibaba’s intrinsic value to be in the range of HKD 120 – 140/share. We will continue to focus on its cloud business and whether its overall performance improves.

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