Market Insight | Alibaba-SW falls more than 4% as the company heavily invests, putting pressure on profits

Alibaba-SW fell more than 4%, as of the time of publication, it dropped by 4.05% to HKD 79.3, with a turnover of HKD 1.351 billion. On the news front, Alibaba's revenue for the fourth quarter of the 2024 fiscal year was RMB 221.87 billion, a year-on-year increase of 7%; net profit was RMB 0.919 billion, a year-on-year decrease of 96%. Regarding the significant drop in net profit, Alibaba explained that it was mainly due to the net loss generated by the valuation change of equity investments in listed companies held by the company, while in the same period last year, it was due to net income. Guosen Securities pointed out that the company's Non-GAAP net profit for this quarter was RMB 24.4 billion, a year-on-year decrease of 11%, with a Non-GAAP net profit margin of 11%. Adjusted EBITA decreased by 5% year-on-year to RMB 24 billion, and the adjusted EBITA profit margin decreased by 1.3 percentage points, mainly due to increased investment in e-commerce business and one-time incentives for rookie employees. The bank expects cloud business and e-commerce revenue to return to growth track, while non-core businesses such as Taotian self-operated, and big entertainment will gradually shrink; increased investment may affect the company's profit release