Alibaba (BABA) 2021 Q1 Earnings. Should you Buy, Sell or Hold?

 

Alibaba Group Holding Limited (NYSE: BABA) today announced its financial results for the quarter and fiscal year ended March 31, 2021.

In the quarter ended March 31, 2021:

 

  • Revenue was RMB187,395 million (US$28,602 million), an increase of 64% year-over-year. Excluding the consolidation of Sun Art, our revenue would have grown 40% year-over-year to RMB159,952 million (US$24,413 million).

 

  • Annual active consumers on our China retail marketplaces was 811 million for the twelve months ended March 31, 2021, an increase of 32 million from the twelve months ended December 31,

 

  • Mobile MAUs on our China retail marketplaces reached 925 million in March 2021, an increase of 23 million over December

 

  • Loss from operations was RMB7,663 million (US$1,170 million) due to a RMB18,228 million (US$2,782 million) fine levied by China’s State Administration for Market Regulation pursuant to China’s Anti-monopoly Law (the “Anti-monopoly Fine”). Excluding this one-time impact, our income from operations would have been RMB10,565 million (US$1,612 million), an increase of 48% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 18% year-over-year to RMB29,898 million (US$4,563 million). Adjusted EBITA, a non-GAAP measurement, increased 14% year-over-year to RMB22,612 million (US$3,451 million).

 

  • Net loss attributable to ordinary shareholders was RMB5,479 million (US$836 million), and net loss was RMB7,654 million (US$1,168 million), primarily due to the above-mentioned Anti- monopoly Fine. Excluding this impact and certain other items, non-GAAP net income was RMB26,216 million (US$4,001 million), an increase of 18% year-over-year.

 

  • Diluted loss per ADS was 99 (US$0.30) and diluted loss per share was RMB0.25 (US$0.04 or HK$0.30), primarily due to the above-mentioned Anti-monopoly Fine. Excluding this impact and certain other items, non-GAAP diluted earnings per ADS was RMB10.32 (US$1.58), an increase of 12% year-over-year and non-GAAP diluted earnings per share was RMB1.29 (US$0.20 or HK$1.53), an increase of 12% year-over-year.

 

  • Net cash provided by operating activities was RMB24,183 million (US$3,691 million). Non- GAAP free cash flow was an outflow of RMB658 million (US$100 million), compared to an outflow of RMB4,214 million in the same quarter of

In the fiscal year ended March 31, 2021:

 

  • Revenue was RMB717,289 million (US$109,480 million), an increase of 41% year-over-year. Excluding the consolidation of Sun Art starting in October 2020, our revenue would have grown 32% year-over-year to RMB674,420 million (US$102,937 million).

 

  • Annual active consumers for the Alibaba Ecosystem reached a milestone of over 1 billion, including 891 million consumers across our China retail marketplace, Local Consumer Services and digital media and entertainment platforms, and approximately 240 million consumers outside Annual active consumers on our China retail marketplaces was 811 million, an increase of 85 million from the twelve months ended March 31, 2020.

 

  • Mobile MAUs on our China retail marketplaces reached 925 million in March 2021, an increase of 79 million over March

 

  • GMV transacted in the Alibaba Ecosystem was RMB8,119 billion (US$1,239 billion) for fiscal year 2021, which mainly included China retail marketplaces GMV of RMB7,494 billion (US$1,144 billion), as well as international retail marketplaces and Local Consumer Services

 

  • Income from operations was RMB89,678 million (US$13,688 million), a decrease of 2% year- over-year, primarily due to the above-mentioned Anti-monopoly Fine as well as a RMB16,054 million increase in share-based compensation expense related to Ant Group share-based awards granted to our Adjusted EBITDA, a non-GAAP measurement, increased 25% year- over-year to RMB196,842 million (US$30,044 million). Adjusted EBITA, a non-GAAP measurement, increased 24% year-over-year to RMB170,453 million (US$26,016 million).

 

  • Adjusted EBITA for core commerce was RMB194,512 million (US$29,688 million), an increase of 17% year-over-year. Our marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, increased 17% year-over-year to RMB229,134 million (US$34,973 million). Starting this quarter, for purposes of presenting our marketplace-based core commerce adjusted EBITA, we expanded the list of new initiative businesses that we break out in order to present the progress of our strategic investments as well as the profitability of our marketplace-based core commerce businesses on a like-for-like The new initiative businesses, which now include our New Retail businesses (primarily Freshippo, Tmall Supermarket, Community Marketplaces and Taoxianda), Local Consumer Services, Lazada, Taobao Deals, Cainiao Network, and others, represent strategic areas where we are executing to capture incremental opportunities. Comparative figures are presented in the same manner accordingly.

 

  • Net income attributable to ordinary shareholders was RMB150,308 million (US$22,941 million), and net income was RMB143,284 million (US$21,869 million), which reflected the above- mentioned Anti-monopoly Fine and the increase in share-based compensation expense described in “Income from operations” above. Excluding these impacts and certain other items, non-GAAP net income was RMB171,985 million (US$26,250 million), an increase of 30% year-over-year.

 

  • Diluted earnings per ADS was RMB54.70 (US$8.35) and diluted earnings per share was 84 (US$1.04 or HK$8.09), which reflected the above-mentioned Anti-monopoly Fine and the increase in share-based compensation expense described in “Income from operations” above. Excluding these impacts and certain other items, non-GAAP diluted earnings per ADS was RMB65.15 (US$9.94), an increase of 23% year-over-year and non-GAAP diluted earnings per share was RMB8.14 (US$1.24 or HK$9.63), an increase of 23% year-over-year.

 

  • Net cash provided by operating activities was RMB231,786 million (US$35,378 million) and non- GAAP free cash flow was RMB172,662 million (US$26,353 million), an increase of 32% year- over-year.

 

CWEB Analyst’s have initiated a BUY Alibaba Group Holding Limited (NYSE: BABA) and potential upside of $299 in 2021. The fundamentals of the company are to strong and cash on hand has increased compare to previous quarter.   We believe Q2 will be the real break for the company with more positive cash flow and new contracts. 64% year-over-year revenue has increased for Alibaba


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