Not sure why many analysts were extremely disappointed with Alibaba for missing earnings expectations which brought about a sell down in the US market. On the contrary, I thought that Alibaba did fairly well for its last March Quarter 2024 and full year. Revenue continued to grow by 7% on a year to year basis for Q4. So clearly, Alibaba seems to be returning to growth mode. I will ignore the "Net Income" due to the "fair value" mark to market for its non-core business activities (public listed investments) and focus instead on the non-GAAP net income. Also interestingly, Alibaba is going to pay out dividends again!
1. Not too bad results- investment for topline revenue growth
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| Q4 March 24 Results |
2. Share Repurchases
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| Share buy-back |
US$4.8 billion was spent buying back ADs and shares in US and Hong Kong markets respectively. This help mitigate the earnings per share decline due to latest strategies to re-ignite growth in Alibaba's business.
3. Fantastic upcoming pay out of regular cash dividends and special dividends to rewards shareholders.
Wow, Alibaba really seems to be becoming a dividend stock. Total year end approved payouts will be a total of US$0.2075. I am currently holding on to about 2,300 shares. So this translates to a dividend of US$477.25. Less off withholding tax of 10% and the quantum we are looking at is thus US$429.53 (S$580) on 3 July 2024 (Wednesday). This is a respectable sustainable dividend yield of almost 2%. Ex-dividend date is on 3 June 2024.
Parting thoughts
Today (15th May) is Buddha's Day in Hong Kong and a public holiday. Once the HKSE open on 16th May 2024, the price will probably drop by 5%-6% to mirror the US market. If there is another strong pull-back on the 9988 counter, I may look into accumulating more Alibaba shares.
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