By Geoffrey Smith
Investing.com -- Alibaba (NYSE:BABA) ADRs rose over 11% in early trading on Thursday, after the Chinese e-commerce company quarterly sales came in comfortably above expectations.
The news offered some much-needed relief to shareholders who have seen it lose all of the last six years' gains in the last 15 months, as China's government has taken a more aggressive approach to regulating what it sees as over-powerful Internet giants.
Alibaba's revenue in the three months through March rose 9%, its slowest growth since listing in 2014 but better than analysts had expected, given the headwinds from extensive lockdowns in various cities and regions of China during the period, most notably in the key economic hub of Shanghai.
By 10 AM ET (1400 GMT), Alibaba ADRs were up 10.8% at $91.17.
CEO Daniel Zhang acknowledged in an analyst call that e-commerce revenue had fallen in April, but that the situation had improved as case numbers in Shanghai came down.
China has refused to abandon its policy of heavy-handed lockdowns to stop the spread of COVID-19, despite increasing evidence of the public anger and economic damage it causes. Various Wall Street analysts have cut their forecasts for China's growth this year to around 4%, well below the official target of 5.5%.
Outgoing Premier Li Keqiang warned of serious consequences for the economy if the ruling Communist Party doesn't change course in a speech on Wednesday. The official readout of Li's speech had been somber enough, but the news agency quoted members of the audience that Li spoke to as saying that the actual remarks were even starker.
According to Bloomberg, Li told this audience that China will pay a huge price with a long road to recovery if the economy can’t keep expanding at a certain rate.
That backdrop ensured that Alibaba didn't give any guidance for the full year on Thursday.