The performance exceeded expectations. Is Ali’s growth still there?

On the evening of May 26, Alibaba announced its fiscal 2022 Q4 and fiscal 2022 full-year results: 2022 Q4 achieved revenue of 224.05 billion RMB, an increase of 8.9% year-on-year; adjusted EBITA was 15.8 billion RMB, a year-on-year decrease of 30%; revenue And the profit side both exceeded market expectations. More financial report data and splits have been elaborated in the article “Alibaba’s fourth fiscal quarter revenue exceeded 200 billion yuan, and net profit fell by 24% year-on-year”, so it will not be repeated here.

In the past year or so, many investors in the market are not optimistic about Ali’s future, and the sharp decline in the capital market also confirms this. Combining the unfavorable domestic macro environment, fierce competition, near-peak Internet penetration, relatively strong regulatory policies, and repeated epidemic disturbances, Zhang Yong proposed “domestic demand”, “globalization”, “” Will the three strategies of “big data cloud computing” still work? Does it need to be adjusted? How will companies respond to the ongoing epidemic? Alibaba Cloud’s growth rate continues to slow down, and leading customers have gradually stopped using Alibaba Cloud and shared cloud services overseas. Is cloud computing really broad enough to become the company’s second curve?

Jianzhi Research firmly believes that Ali’s strategic direction is correct. Jianzhi Research once reported negative growth in the core business for the first time, or did Alibaba take the initiative to do it? ” summed up Ali’s strategy: the traditional e-commerce in the domestic market is the basic market, and it must be done as deeply as possible on the basis of holding it, and it must be expanded as much as possible; high-frequency scenarios and near-field retail must enter, and its market capacity The characteristics of large size and low penetration rate will bring incremental growth to the company; continuous investment in logistics infrastructure and cloud computing is to lay a solid foundation for the expansion of domestic and international business; cloud computing is not only conducive to the sustainability of its own business system. Sustainable development, its technology and technological innovation is an important link that can help society achieve high-quality development.

As far as domestic demand is concerned, a major controversy in the market is whether Alibaba’s path of investing heavily and investing heavily in local retail services in recent years is correct. Taocaicai, Taote, Taoxianda, etc. all consume huge resource investment, and the competition is fierce; Hema and RT-Mart also continue to increase offline, and have high cash flow requirements; Jianzhi Research believes that the establishment of a large and comprehensive The local life retail service system, forming a diversified business model of far-field, mid-field and near-field to achieve all-round coverage of consumer demand is the “difficult but correct thing” that Ali must do : although traditional retail e-commerce is commercial The model is relatively easy to make money, and the scale is already very large, but the growth space is already small, and it is vulnerable to the repeated disturbance of the epidemic: For the past fiscal year, Taobao and Tmall excluding unpaid orders The online physical GMV is low Single-digit decline; from the perspective of FY 2022 Q4, the combined GMV in January and February was the same as the same period last year, negative growth in March due to the impact of the epidemic, and a year-on-year decrease of slightly more than 10% in physical transactions of Taobao in April.

At the FY2022 Q3 performance exchange meeting, the company admitted that “the penetration rate of the clothing and other categories that it is good at has been difficult to continuously increase, but the categories of fast-moving consumer goods, food, fresh food and other categories have a very large absolute market capacity and e-commerce penetration. low rate”. Last night, the company also mentioned that under the repeated disturbances of the epidemic in the past three months, consumers at all levels have a stronger demand for daily necessities, and there is an urgent need to stock up. played an important role in guaranteeing supply. In addition, the investment of Taote, Taocaicai, etc. can also feed back new ones, and further improve the supply chain and logistics performance network, and promote long-term sustainable development.

Yesterday’s financial report also disclosed that Alibaba’s technology-related costs in FY2022 exceeded RMB 120 billion, of which cloud computing business is the main part of investment, although its revenue in FY2022 reached more than 100 billion and 74.57 billion before and after offsetting cross-segment transactions. , and achieved its first profit, but the continuous slowdown of its growth rate combined with the unsatisfactory macroeconomic environment, the difficulties in the Internet industry, the most important customer at present, and the exit of leading customers have made some investors have room for future development. There are concerns.

Jianzhi Research believes that there is no need to be pessimistic about the future of (Alibaba) cloud computing:

First of all, even though the Internet industry as a whole has encountered certain difficulties, the demand for cloud computing in various emerging industries is only a lot more; major trends such as automobile and home intelligence, metaverse, and digital intelligence industrialization are still very broad for cloud computing. space to explore, as the management said yesterday, there is a “huge universal opportunity”.

Second, the macro economy is bound to delay the cloud demand of a considerable number of enterprises in the downward cycle, but this demand will only be postponed and will not disappear.

Finally, Alibaba’s cloud business has its unique advantages and significance. In addition to competing for R&D and investment in software and hardware, developing cloud business is more important to accurately understand customer needs and pain points. In 2021, Alibaba has realized that all its business will be put on Alibaba Cloud, becoming the first and only company in the world to put all its business on its own cloud. Alibaba’s business diversification, hugeness, and complexity just provide Alibaba Cloud’s excellent continuous high-pressure test.

The correct strategic direction is only a necessary condition for success. In addition, it also requires strong leadership and execution to complete it. Seezhi Research believes that CEO Zhang Yong has the ability to ensure that Ali will go through thorns and move forward smoothly in the future : “Domestic demand”, “” The three strategic directions of globalization” and “big data cloud computing” have not been questioned, but Zhang Yong’s attitude has not been shaken. “The most taboo is to walk 100 kilometers south, and I feel that the signs are not right, so I quickly turned and headed north. Go, go and go back again.” At the Ali relatives and friends meeting earlier this month, Zhang Yong also emphasized Ali’s three main tracks twice, showing his determination.

In addition, Zhang Yong attaches great importance to organizational construction. When a series of organizational structure adjustments are announced recently, he will mention “agile organization, simple culture”; after a series of operations, Zhang Yong is indeed constantly practicing the past. The two inescapable responsibilities of the No. 1 position: business design and organizational design.

To sum up, Zhizhi Research believes that Alibaba is on the right strategic path, and it does face certain challenges in the short term, but in the long run, there is still a lot of room for growth.

This article is reprinted from: https://news.futunn.com/post/15936480?src=3&report_type=market&report_id=206773&futusource=news_headline_list
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