Spring is still warm and cold, and the general environment of the Internet market is nothing more than that.
Every year now, it was the peak season of spring recruitment, but Ali broke the news of layoffs and once rushed to the hot search. It is rumored that Ali's MMC business unit is planning to lay off employees, and a number of business lines have preliminarily finalized the layoff list. The "Ali Investment Exchange Group" on the Internet has been discussed internally, "Ali has laid off 30% of its employees", "the real broken arm to survive, to see whose cash survives this year".
Ali's 2022 is really sad, since the beginning of this year, Ali's stock price has indeed plummeted. At one point, it fell to $77.76 per share, corresponding to a market capitalization of $209.2 billion, which is equivalent to evaporating 3.8 trillion yuan compared with Ali's original market value of $800 billion.
Alibaba' ups and downs
Turning the clock back to October 2020, Alibaba's stock price peaked at more than $300 a share and then took a sharp turn. There are many reasons, the most important of which is that Alibaba's fintech giant Ant Financial has been suspended.
Capital markets are the most sensitive and the most direct response. Alibaba's stock price has fallen and fallen, but the misfortune is that the bad news is one after another. The country's policies began to tighten, anti-monopoly, to prevent the disorderly expansion of capital, Alibaba was criticized one after another.
At the end of February this year (2022), Alibaba released the worst report card in history, which was once again slapped by the capital market.
According to the third quarter of fiscal 2022 (fourth quarter of 2021), Alibaba achieved revenue of 242.58 billion yuan in the three months ended December 31, 2021, an increase of 10% year-on-year, setting the lowest growth rate since its listing in the United States in 2014.
Although alibaba china's business segment revenue was 172.2 billion yuan, an increase of 7% year-on-year. However, it is worth mentioning that the customer management business that reflects the performance of Taobao and Tmall in the middle achieved revenue of 100.1 billion yuan, down 1% year-on-year, which is also the first time that the business has experienced a year-on-year decline in recent years.
In terms of net profit, Ali achieved a net profit of 20.429 billion yuan this fiscal quarter, down 75% year-on-year. Even under non-GAAP, Alibaba's net profit was 44.624 billion yuan, down 25% from the same period last year.
In Alibaba, Daniel Zhang, Chairman of the Board of Directors and Chief Executive Officer of alibaba, said that in a complex and changeable market environment, Alibaba Group continues to firmly implement its multi-engine growth strategy and shows a positive development trend in key strategic businesses, laying the foundation for future long-term growth.
The day after Alibaba's "worst ever" earnings report was announced, Alibaba's U.S. stock opening price fell from $109.72 to $100.074, a drop of nearly 9%, a new low in nearly five years, and the total market value shrank by two-thirds from the highest point in history.
This is followed by the influence of international factors. The Russo-Ukrainian war has led to turmoil in the US stock market, and Chinese stocks have fallen into a downward tide, and Alibaba is no exception.
Compared with Alibaba's listing in 2014, its issued stock price was $68 per share, and the final closing price exceeded $90 per share. Alibaba's stock price of $75.14 per share, it can be said, is back to the starting point.
Underrated Alibaba
However, this does not mean that an Internet giant will be devastated.
From its listing in 2014 to the present, Alibaba's operating performance has increased by 14 times, and its net profit has soared directly from 43.675 billion in March 2017 to 149.433 billion in 2020, which only took 3 years. The Internet market makes money fast and disappears quickly. You know, during the bear market in 2015, Alibaba's stock price fell below the issue price that year, and the lowest fell to $57.2.
The Alibaba ecosystem's annual active global consumers reached approximately 1.28 billion in the 12-month period ended December 31, 2021. Alibaba's active user data has reached 800 million, which is not a height that any platform can casually touch.
Ali is facing a dilemma and is also actively coping. First of all, the adjustment of the organizational structure, Dai Shan, one of the eighteen Arhats in Alibaba's founding team, took up the position of head of Alibaba's China digital business sector, and was fully responsible for the business of Taobao (including Taobao, Tmall, Alimama), B2C retail business group, Taocaicai, Taote and 1688. If the two major business groups of Taobao Tmall are merged, "Cat Enjoyment" came into being.
In addition, Alibaba's annual R&D investment accounted for 8.4% of Alibaba's total revenue in 2020. It is close to the proportion of Huawei's annual R&D investment. This can also be seen in Ali's ambitions, but also can confirm its development strategy of burning money.
As can be seen from the transcript, Alibaba divides its main business into seven categories: China Business, International Business, Local Life Services, Cainiao, Cloud Business, Digital Media and Entertainment, and Innovative Business and others. Among them, in addition to the digital media and entertainment business, Alibaba's other six major business segments maintained positive revenue growth.
Although Taoji e-commerce as Alibaba's most core business has also experienced a rare decline, it has aroused the vigilance of investors. But I have to say that today's stock price is still undervalued.
Just on the evening of March 16, Alibaba's U.S. stock price soared 37%, setting a record for the largest one-day increase since its listing, the market value also increased by about 500 billion yuan, and the Price of Hong Kong stocks also soared on the same day, with Hong Kong stock prices rising 27% to close at HK$90.7 per share, and by the day of March 17, Hong Kong stock prices rose to HK$102.
In this way, Alibaba's stock price that fell in March was all recovered.
Also worth mentioning is Alibaba Group's share buyback. Back on December 28, 2020, Alibaba Group's board of directors authorized the repurchase of $10 billion in American depositary shares. By August 2021, Alibaba announced that it would expand its buybacks to $15 billion.
Just last month, Alibaba expanded its share repurchase program to $25 billion, setting a record for Chinese stock buybacks. You know, this buyback size is about one-tenth of Alibaba's market value! In less than three quarters, Alibaba Group expanded its share repurchases for the second consecutive time, reflecting its confidence in continued growth in the future.
Industry insiders said that in the medium and long term, Alibaba's bearishness has been fully released, the bubble has been fully decompressed, with the completion of the rectification of the future platform economy, Alibaba's stock price will enter a stable period, with the recovery of performance, the timing of stock price recovery will come back.