On the evening of November 16th, Alibaba Group disclosed its Q2 performance for the fiscal year 2024 as of September 30, 2023. The data showed that the group's revenue reached 224.79 billion yuan (RMB, the same below), exceeding market expectations and achieving a year-on-year growth of 9%; After adjustment, the year-on-year growth rate of EBITDA reached 14%, reaching 49.24 billion yuan; The adjusted net profit was 40.19 billion yuan, a year-on-year increase of 19%. During the quarter, Alibaba stated that self transformation has been continuously promoted with significant results, and multiple businesses have achieved rapid growth. The development momentum has been further released, and the growth path towards the future is clear.
Compared to numbers, the series of heavyweight news disclosed in Alibaba's Q2 financial report is more noteworthy. According to the financial report, due to various uncertain factors, the complete separation of Cloud Intelligence Group will no longer be promoted. Meanwhile, Hema's initial public offering plan has been postponed.
Strong global business growth and significant growth in idle fish quarks
In terms of core business. The financial report shows that Taotian Group's user first, ecological prosperity, and technology driven strategy have been effective in this quarter. The participating merchants, transaction buyers, and order volume of Tmall Double 11 have all achieved positive growth compared to the same period last year. While continuously investing in expanding the scale of users and merchants, Taotian Group's core performance indicators continue to grow. According to the recently concluded Double 11 data, the cumulative number of users visited during the entire cycle of Taobao Double 11 exceeded 800 million, reaching a historical peak.
Alibaba Cloud's revenue increased by 2% year-on-year to 27.648 billion yuan, and its adjusted EBITA profit increased significantly from 387 million yuan in the previous quarter to 1.409 billion yuan, a month on month increase of 264%. Alibaba stated in its financial report that we are continuously improving the quality of revenue by reducing project based contract revenue with lower profit margins. At the same time, the revenue growth of public cloud products and services in this quarter has driven the optimization of profitability.
Global business growth is strong, with Alibaba International Digital Business Group's revenue increasing by 53% year-on-year. The strong performance of major retail platforms such as AliExpress, Lazada, and Trendyol has driven the overall order growth of Alibaba International Digital Business Group's retail business by about 28% year-on-year, with revenue increasing by 73% year-on-year. At the same time, both logistics and e-commerce have gone global, and Cainiao Group's revenue has increased by 25% year-on-year. The offline recovery has brought strong user demand, with local living group revenue increasing by 16% year-on-year and large cultural and entertainment group revenue increasing by 11% year-on-year. At the same time, the daily active user count (DAU) of the popular Quark and Xianyu apps among young consumers has significantly increased. In September 2023, quark DAU increased by over 35% year-on-year, while idle fish DAU increased by over 20% year-on-year.
Alibaba Group CEO Wu Yongming stated that Alibaba Group's performance this quarter was stable, with multiple businesses demonstrating new momentum and vitality, and significant results in proactive self transformation. As we officially enter a new stage of development and face the future, we have clearly defined our strategic focus and priority direction. We will maintain an entrepreneurial mindset, invest more resolutely, make more decisive choices, and use a more flexible governance mechanism to seize the new opportunities brought by AI technology changes and create more customer value
It is worth noting that the financial report also revealed that Hema's initial public offering plan is temporarily suspended. The company is evaluating the market conditions and other factors necessary to ensure successful project implementation and enhance shareholder value.
Will increase Alibaba Cloud's strategic investment
The reporter noticed. 'Proactive change' is the keyword for Alibaba in the first half of 2023. In Alibaba's second fiscal quarter, Alibaba pointed out that Taobao continues to optimize its value positioning, and the number of transaction buyers and order volume have both increased in the quarter; Alibaba Cloud adheres to the dual wheel drive of "AI+cloud computing", upgrades AI infrastructure and prospers AI ecology, continuously improves income quality, and has a clear path for long-term healthy growth.
The financial report shows that driven by strategies such as contentization, price competitiveness, and AI application, Taobao App users have achieved healthy year-on-year natural growth, with a strong increase in the duration of users watching short video content. The financial report shows that the number of 88VIP members in this quarter has exceeded 30 million, achieving a double-digit year-on-year growth. The scale of high-quality consumer groups continues to expand. The reporter noticed that in May this year, Dai Shan, CEO of Taotian Group, announced three major strategies: "user first, ecological prosperity, and technology driven". Analysts point out that the three major strategies aim to expand Taobao's leading advantages on the user and supply sides, forming a multiplier effect. The technological capabilities represented by AI are key levers for amplifying the multiplier effect and improving conversion rates.
On the Alibaba Cloud side, at the 2023 Yunqi Conference held at the end of October this year, the AI infrastructure was comprehensively upgraded, and the self-developed basic model, Tongyi Qianwen, was upgraded to version 2.0 with 100 billion level parameters. At the same time, the financial report disclosed that due to various uncertain factors, the complete separation of Cloud Intelligence Group will no longer be promoted. At the same time, Alibaba will resolutely increase its continuous strategic investment in Alibaba Cloud, ensuring that Alibaba Cloud focuses on the development strategy of "AI+cloud computing" and creates a technologically leading cloud computing service in the AI era.
It is reported that during a financial report conference call held by Alibaba after the release of the second quarter report for the 2024 fiscal year, investors asked whether Alibaba Cloud's listing plan would be "suspended" or "permanently cancelled", and asked whether "Alibaba Cloud's spin off will be reconsidered after the market situation changes". Cai Chongxin, Chairman of the Alibaba Group Board of Directors, did not provide a clear answer to this question.
Cai Chongxin stated that at that time, he wanted to achieve a complete separation of Alibaba Cloud in order to demonstrate the true value of the business through the so-called financial engineering method. At that time, Alibaba Cloud was in a predictable environment and the entire operation could be transparent, demonstrating the growth trend of the business to investors. Now that the overall environment has changed, Cai Chongxin said that the value of cloud business is no longer being demonstrated through "financial engineering", but through "further investment". We will seek to increase its growth in the future, including revenue and profits
(Note: Alibaba's fiscal year is not synchronized with the natural year, and the fiscal year is from April 1st to March 31st of the following year.).