Alibaba reports 2 per cent revenue growth for fourth quarter, board approves separate listings for Cloud, Cainiao units

The Hangzhou-based company reported revenue of 208.2 billion yuan for the three months ended March 31, representing a 2 per cent year-on-year increase

The cloud business, one of the company’s most important growth engines, will be listed in 12 months, said Alibaba Group chairman and CEO Daniel Zhang Yong

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Alibaba signage is seen in front of its offices in Guangzhou, southern China. Photo: Bloomberg

Tracy Quin ShanghaiandAnn Caoin Shanghai

Published: 7:48pm, 18 May 2023Updated: 10:58pm, 18 May 2023

Chinese e-commerce giant Alibaba Group Holding reported a 2 per cent increase in revenue for its fourth quarter, while also approving a full spin-off of its Cloud Intelligence Group, as well as external financing for multiple business units, in its first earnings report since the company announced a major restructuring earlier this year.

The cloud business, one of the company’s most important growth engines, will be listed in 12 months, said Alibaba Group chairman and CEO Daniel Zhang Yong. In the quarter ending March 31, cloud revenue decreased by 2 per cent from a year ago to 18.6 billion yuan, contributing 9 per cent of the group’s total revenue.

Zhang, who took direct control of the cloud unit last December, said the revenue drop was partially a result of “external changes in the marketing environment and customer composition”. He added that the company’s restructuring and innovation efforts, such as the launch of its new large language model Tongyi Qianwen, will bring “greater long term returns.”

The company said that it expects the listing of Freshippo, its supermarket chain, will be completed in the next 6 to 12 months, while it is targeting completion of the Cainiao IPO in the next 12 to 18 months.

Alibaba also said it has formed a capital management committee to undertake a “comprehensive capital management plan to enhance shareholder value”. The committee is chaired by Zhang, with members including director and executive vice chairman Joseph Tsai, director and president J. Michael Evans, and director and former chief financial officer Maggie Wu.

The Hangzhou-based company, which owns the South China Morning Post, reported revenue of 208.2 billion yuan (US$30.3 billion) for the three months ended March 31, representing a 2 per cent year-on-year increase. The result was just below the consensus estimates of 209.2 billion yuan, according to analysts polled by Bloomberg.

Alibaba’s net income swung to a profit during the quarter, as expected. Net income reached 23.5 billion yuan during the quarter, compared with last year’s 16.2 billion yuan loss when investments eroded its profitability, exceeding analysts’ expectations of a 15.1 billion yuan profit. Adjusted profits were 27.4 billion yuan, up 38 per cent from a year ago.

The company said the higher income was “primarily due to net gains arising from the increases in the market prices of our equity investments in publicly-traded companies”.