Alibaba (HK. 09988) announced today that it will distribute annual dividends for the first time in the fiscal year 2023 to registered holders of common stock and American depositary shares as of the close of trading on December 21, 2023, Hong Kong time and New York time. The total amount of dividends will reach 2.5 billion US dollars (approximately 17.894 billion yuan).
To ensure accurate statistics and distribution of dividends, and to protect shareholder rights, the conversion between Alibaba's ordinary shares and American Depositary Shares will be suspended during the closing period of the New York market from December 15, 2023 to December 21, 2023. For investors who want to catch up with dividend payouts, buying Alibaba stocks before the ex dividend date on December 20th is sufficient. Suspending conversion does not affect the company's normal trading on the Hong Kong and US stocks.
The decision to distribute dividends to all shareholders this time is the first large-scale dividend distribution since Alibaba's listing on the US stock market in 2014 and its return to the Hong Kong stock market in 2019.
According to analysis, Alibaba has been known for its conservative financial and business strategy since its establishment, with only three dividend payouts recorded, including this one.
The first time was in 2009, when Alibaba celebrated its 10th anniversary by distributing a special dividend of HKD 20 per share to shareholders, with a total amount of HKD 1.01 billion (approximately RMB 880 million), marking the largest dividend distribution in the history of the internet industry at that time. At that time, Alibaba's semi annual report showed that its revenue maintained rapid growth, but its net profit declined significantly year-on-year. However, in its financial report, it stated that "the Internet, especially e-commerce, is full of development opportunities.".
The second dividend occurred in December 2010, when Alibaba announced a total distribution of approximately HKD 1.1 billion (approximately RMB 940 million) and an additional equity incentive of up to 156 million shares to employees. Recruiting employees and compensating shareholders has become the key starting point for this dividend payout. At that time, Alibaba's third quarter report showed that the company's revenue and net profit growth rate were both around 45%, which satisfied many parties.
However, based on the recent performance of Alibaba's stock price, the market is not satisfied with the three dividend payouts and the recent financial report growth.
Since November 16th, Alibaba's Hong Kong stock price has continued to decline, with a cumulative decline of 16.05% in 15 trading days. Similar trends have also been observed in the US stock market, with a decline of 16.87% in 13 trading days since November 16th. The negative sentiment is even more pronounced.
It is worth mentioning that while disclosing information such as dividends and performance growth, Alibaba also announced that it will no longer split Alibaba Cloud and temporarily suspend the IPO process of fresh e-commerce Hema.
Some comments suggest that the diversification of consumer channels and consumption downgrades have affected the market's growth expectations for Taotian Group, while the suspension of Alibaba Cloud's split has raised concerns about its "new growth curve" in the market. The controversy of Jack Ma's reduction of holdings, which was heavily refuted by Alibaba, has further made the short-term stock price of the company uncertain.
At the beginning of this year, JD.com, whose stock price continued to decline, also proposed large cash dividends. According to previous announcements, while disclosing its 2022 financial report, JD.com announced cash dividends with a total payout amount of $1 billion (approximately RMB 7.158 billion). Xu Ran, then Chief Financial Officer of JD.com, stated that in order to demonstrate our healthy profitability, balance sheet, and commitment to shareholder value, we are pleased to give back to shareholders through cash dividends.
However, JD's large dividends, as well as the shift in operational strategies such as "billion dollar subsidies" and the strong introduction of third-party merchants, have not received market support. After the dividend, JD's stock price continued to fluctuate for several months, and with the disclosure of its mid year and third quarter reports, JD's US stock price continued to show a downward trend.
In contrast, some Chinese concept stocks have seen their stock prices rise recently. Among them, Pinduoduo's US stock price has risen by a cumulative 25.38% since November 16th, with a total market value of $190.6 billion, successfully topping the Chinese concept stock market value list with a record of surpassing Alibaba's $6.3 billion.
In terms of revenue and net profit growth, Pinduoduo's Q3 2023 financial report far exceeded expectations, with a quarterly revenue of 68.841 billion yuan, a year-on-year increase of 93.89%; The net profit attributable to the parent company during the same period reached 15.537 billion yuan, a year-on-year increase of 46.74%.
Pinduoduo has not received any dividends since its listing, and the funds it receives are used to invest and expand its domestic and overseas businesses. As of the third quarter, Pinduoduo's cross-border e-commerce Temu business has continued to invest and has achieved unexpected growth, successfully expanding into 47 global markets such as North America, Europe, the Middle East, and Australia.
However, in terms of revenue scale and net profit growth, Alibaba remains the "big brother" of Chinese concept stocks. According to the financial report, Alibaba's latest quarterly total revenue reached 247.8 billion yuan, a year-on-year increase of 2.13%; The net profit attributable to the parent company during the same period was 46.815 billion yuan, a year-on-year increase of 129.16%.