On February 13, 2020, Ali ( NYSE: BABA; HK: 9988 ) released quarterly results for the year ended December 31, 2019 ( Q3 FY2020 ). The report shows that the group’s revenue was 161.4 billion yuan, an increase of 37.7% year-on-year, and its net profit was 50 billion yuan, an increase of 61.9% year-on-year.

“Bonus” only favors those who are prepared

For the full year of 2019, Ali’s revenue was 488.9 billion yuan, a year-on-year increase of 41.6%. Among them, in 2019 Q4 revenue was 161.4 billion yuan, which is 60.3 billion yuan more than the whole year of 2016.

The main driver of Ali’s revenue growth is core e-commerce. In Q4 2019, core e-commerce revenue was 141.5 billion yuan, an increase of 37.6% year-on-year, and the growth trajectory is exactly the same as the “big market”. In the natural year of 2019, total core e-commerce revenue was 421.1 billion, an increase of 42.4% year-on-year.

The main factor driving the growth of core e-commerce revenue is the number of users.

As of the end of 2019, annual active buyers ( At least one purchase in the past 12 months ) reached 711 million, an increase of 1800 from the end of September Million, an increase of 75 million compared with the end of 2018 ( Equivalent to 2 VIP events ). The financial report also revealed that more than 60% of the new active buyers came from less developed regions ( The near-term words are “sinking market”, “low-tier cities”, “).

In Q3 of 2019, the average MAUs on the mobile end was 824 million (

Every month, 820 million people come in to see. In the past 12 months, 710 million people bought it, which means that there must be more than 100 million people who visit Tmall and Taobao purely for “unblocking”. No wonder Ma Yun said that “Ali is an entertainment company.”

The quarterly report also disclosed some data of the core e-commerce branch business: as of the end of 2019, the total number of Hema stores reached 197; the quarterly revenue of local living services was 7.584 billion; did you get hungry? 48% of the new users came from Alipay APP … < / p>

Facing a single market with a population of 1.4 billion, this is a common opportunity for Chinese and foreign businesses, but the opportunity only favors those who are prepared. Ali has been preparing for twenty years for today. From solving payment to establishing and improving a two-way evaluation system for sellers and buyers; from cracking down on counterfeiting and spoofing to introducing brand merchants; from cloud computing to Cainiao Network.

From Tencent, Netease, and Amazon China, they are not given the big cake of Chinese e-commerce because of insufficient preparation.

China has more than 1 billion mobile phone users, and Qicheng has become an active Ali user ( active custo mer ), but 1 billion users is not a ceiling. As early as the author attended the Ali Investor Conference in 2017, CEO Zhang Yong told the analysts present that “Ali will serve 2 billion consumers worldwide in the future.”

In September 2019, at the 20th anniversary celebration, Zhang Yong announced the fiscal year 2024 ( April 1, 2023, March 31, 2024 ) Goal: Serving 1 billion users and total transaction value of 10 trillion.

In the “New Six-pulse Excalibur” subsequently announced, Ali announced the company’s vision is: to be a good company for 102 years; by 2036, serve 2 billion consumers, create 100 million jobs, and help 10 million Profit for SMEs.

20-year-old grandfather at an internet company, but “Although Zhou is an old state, his life is renewed, “Ali can’t see his old state.

Non-ecommerce business keeps up with the “big market”

In Q4 of 2019, Alibaba’s e-commerce business revenue totaled 19.98 billion yuan, an increase of 38.4% year-on-year, and its share in total revenue remained at 12.4%, generally keeping up with the “big market”.

The e-commerce business shows significant seasonal fluctuations. The “peak” appears in Q4 every year, while the non-e-commerce business is relatively stable and has no seasonal fluctuations, so the proportion of total revenue fell into the “trough” in Q4.

In Q4 2018, cloud computing revenue was 6.6 billion, surpassing the digital entertainment segment for the first time.

In Q4 2019, cloud computing, digital entertainment, and innovation business revenues were 10.7 billion, 7.4 billion, and 1.9 billion, respectively. The year-on-year growth rates were 62%, 14% and 40%. This is also the first quarter of cloud computing revenue to exceed 10 billion.

In the natural year of 2019, cloud computing, digital entertainment, and innovation business revenues were 35.6 billion, 26.7 billion, and 5.6 billion, respectively.

In 2017, the largest contribution to revenue growth among non-ecommerce businesses was digital entertainment ( 19% ). Contribution rate is as high as 27%.

In 2018, digital entertainment “turned straight”, contributing only 5% to revenue growth, and the total non-ecommerce business contributed 13%.

In each quarter of 2019, cloud computing’s contribution to revenue growth is about 10%, becoming the growth engine behind only core e-commerce.

Looking at Ali’s major business sectors, E-commerce growth is equal to the broader market, cloud computing is growing faster than the broader market, and digital entertainment is underperforming the broader market.

In the first three quarters of 2019, Ali Digital Entertainment’s total revenue was 19.3 billion yuan, an increase of 12.1% year-on-year; iQiyi’s total revenue for the first three quarters was 21.5 billion yuan, an increase of 19.8% year-on-year. But Ali Digital Entertainment covers more businesses than iQiyi.

Gongma Yinshi

1) Profit before interest and tax

The core e-commerce business EBITA ( profit before interest and tax ) shows obvious seasonality, and Q4 is the peak of the year. Q4 in 2019 reached a record 58.1 billion, with an average of 630 million per day and a profit margin of 41%.

In Q1 2019, cloud computing EBIT loss was 2.1%; Q2 and Q3 EBIT losses were 390 million and 520 million, respectively, and the loss rate increased slightly; Q4 EBIT loss was 360 million and the loss rate was 3.3 %. For the full year of 2019, cloud computing ’s total EBIT loss was 1.42 billion ( EBIT 2018 loss before tax is 1.35 billion ).

In the past six quarters, Alibaba Cloud has maintained the balance between the growth rate and the loss limit they want. Thanks to a little bit, the revenue growth rate can be higher; sacrificing speed, earning a few percentage points, and turning losses into profits at any time.

The losses in the digital entertainment sector are mainly from Youku Tudou. At present, the battle with Tencent Video and iQiyi is still anxious. In Q2 of 2019, digital entertainment had an EBIT loss of 2.21 billion, with a loss rate of 30%; Q4 had an EBIT loss of 3.3 billion, with a loss rate of 45%.

The three major video sites are fighting “burning money for a long time.” It’s like fighting against internal forces. Despite all the hard work, no one dares to relax.

In Q4 of 2019, EBIT of core e-commerce was 58.1 billion, and EBIT losses of cloud computing, digital entertainment, and innovative businesses totaled 5.52 billion, equivalent to 9.5% of E-commerce profits. In Q4 2018, this percentage was 17.2%.

The whole year of 2019, cloud computing, digital entertainmentThe loss before interest and tax of the music and innovation business totaled 19.1 billion yuan, equivalent to 11.6% of the profit before interest and tax of e-commerce.

Ali takes one-tenth of the money earned by e-commerce to support cloud computing, online video, high-tech maps, Ali movies, UCWeb and other “non-profitable” businesses that are essential for ecological construction.

In Q4 2019, Ali’s net cash flow from operating activities reached 96.5 billion, equivalent to 192% of net profit. In addition, US $ 12.9 billion was raised in Hong Kong. As of December 31, 2019, Ali’s book cash reached 371.5 billion.

Ali has entered its heyday. But if the goal of serving 2 billion people can be achieved by 2036, the current position is only “half the mountainside.”

When an individual or a company feels helpless and desolate on “Banpo”, it is because the “strength” is exhausted, and every step forward is very difficult until they are forced to stop. Ali is not the case. “Good candidates are like clouds and bow horses are full of solidity”, and “Banpo” is a state of hope.