Salem Radio Network News Saturday, November 27, 2021

Science

China’s Alibaba warns of slowest revenue growth since debut

By Subrat Patnaik and Josh Horwitz

(Reuters) -China’s Alibaba Group Holding Ltd forecast annual revenue to grow at its slowest pace since its 2014 stock market debut as second-quarter results missed expectations due to slowing consumption, increasing competition and a regulatory crackdown.

U.S.-listed shares of Alibaba, which expects its fiscal year 2022 revenue to grow by 20% to 23%, were down 3% before the opening bell on Thursday.

The company last week recorded its slowest sales growth during its annual Singles’ Day, the world’s biggest online shopping fest.

Once a major media event, the company downplayed its sales tallies and instead highlighted its efforts to improve social welfare and the environment.

China’s big tech companies have also been under pressure as the country’s regulators clamp down on powerful players from Alibaba to ride-hailing giant Didi Global Inc, citing antimonopoly and security reasons.

The crackdowns have also hurt Chinese gaming and social media giant Tencent Holdings, which posted its slowest quarterly revenue growth since it went public in 2004.

Alibaba’s founder Jack Ma has been largely out of public view since criticising China’s regulatory system last year.

Authorities forced the suspension of the $37 billion initial public offering of Alibaba’s fintech affiliate Ant Group last November, and imposed a record $2.8 billion fine on Alibaba for anti-competitive business practices in April.

The company logged its first operating loss as a public company the same quarter it faced the penalty, and has lost about a third of its market value so far this year.

For the reported quarter, the e-commerce juggernaut’s revenue growth rose 29% to 200.69 billion yuan ($31.44 billion), its slowest rate of growth in six quarters. Analysts on average had expected revenue of 204.93 billion yuan, according to Refinitiv data.

Adjusted net income hit 28.52 billion yuan, down 39% year-on-year. The company said earlier this year it intends to invest heavily in areas such as Taobao Deals, an e-commerce service targeting lower-tier cities, and offline retail initiatives.

Revenue at Alibaba’s China commerce retail business, its main e-commerce unit, hit 126.83 billion yuan, a 33% year-on-year increase.

Revenue from cloud computing reached 20 billion yuan, also up a third year-on-year.

On an adjusted basis, it earned 11.20 yuan per share, below estimates for 12.36 yuan.

Ant Group recorded a quarterly profit of about 19.7 billion yuan for the quarter ended June. Alibaba records its profit from Ant one quarter in arrears.

($1 = 6.3838 Chinese yuan renminbi)

(Reporting by Subrat Patnaik in Bengaluru and Josh Horwitz in Shanghai; Editing by Arun Koyyur, Kirsten Donovan)

Previous
Next

Editorial Cartoons

View More »

Bob Gorrell
Mon, Nov 15, 2021

X CLOSE