🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Alibaba shares slide as earnings miss overshadows $25 bln buyback

Published 02/07/2024, 09:35 PM
© Reuters
HK50
-
BIDU
-
0700
-
JD
-
BABA
-
PDD
-
9988
-

Investing.com-- Hong Kong shares of Alibaba Group (NYSE:BABA) (HK:9988) fell sharply on Thursday as worsening conditions in China saw its fourth-quarter earnings miss expectations, while a $25 billion increase in its share repurchase program did little to inspire confidence. 

Alibaba slid 5.2% to HK$71.0 by 20:59 ET (01:59 GMT), and dragged the broader Hang Seng index 0.6% lower. Alibaba rival JD.com (NASDAQ:JD) (HK:9618) was flat in Hong Kong trade, as were Chinese tech peers Baidu (NASDAQ:BIDU) (HK:9888) and Tencent Holdings Ltd (HK:0700).

The firm’s American depository receipts also slid 5.9% in overnight trade.

Alibaba’s earnings per share for the December quarter were RMB18.97, missing analyst estimates of RMB 19.17, while revenue was RMB 260.35 billion, just missing expectations of RMB 260.65 billion.

The earnings misses came largely from slower revenue increases in the group’s flagship Taobao and Tmall Group, as consumer demand in China remained weak. 

The group is also facing increased competition from newer entrants to the online retailing space, particularly PDD Holdings' (NASDAQ:PDD) Pinduoduo . PDD recently overtook Alibaba as China’s most valuable e-commerce company. 

But retailers in China are facing an increasingly dire environment, as persistent economic weakness in the country chipped away steadily at discretionary spending. Data released on Thursday showed Chinese consumer price index inflation grew less than expected in January despite a bump-up in holiday spending, as consumers remained largely cautious.

Alibaba announced a $25 billion increase to its share repurchase program till 2027 to help shore up sentiment. But the move had so far appeared to have provided little support to the stock. 

Alibaba’s cloud business also came under pressure from increased competition, and was still reeling from the impact of a bitter price war over the past two years. The group had recently scrapped plans to spin off the business, citing uncertainties over chip supply following U.S. restrictions on tech exports to China. 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.