Shanghai: China alibaba Group Holding missed analysts on Wednesday Estimate for the third quarter Incomehit by force Competition And the economic recovery in the world’s second-largest economy is faltering.
Alibaba’s US-listed shares fell nearly 6% as the company’s plan to buy back $25 billion of stock failed to excite investors.
Alibaba’s Hong Kong shares were down 5.4% early Thursday.
The company faces stiff competition from rivals such as Douyin and PDD Holdings, which have changed the e-commerce landscape by selling low-cost and discounted items year-round.
In the biggest restructuring in Alibaba’s 24-year history, the company announced last March that it would split into six units to combat slowing earnings growth. But just a few months later, plans for a spin-off and IPO for the cloud unit were canceled amid uncertainties over US restrictions on exports to China of chips used in artificial intelligence applications.
“Our top priority is to restart the growth of our core businesses, e-commerce and cloud computing,” CEO Eddie Wu said Wednesday. Wu, group CEO since September, directly oversees both the domestic e-commerce arm and Alibaba’s cloud unit.
Alibaba’s net income attributable to common shareholders was 14.4 billion yuan ($2 billion) and net income was 10.7 billion yuan, mainly due to valuation changes from equity investments and losses related to hypermarket operator Sun Art and online video streaming service Youku. Was 77% less.
“They (Alibaba) have indicated that 2024 will be an investment year… so profitability is likely to be lower because of that,” said Bo Pei, analyst at US Tiger Securities.
Taobao and Tmall group revenue grew just 2% in the quarter, including year-end sales events like Singles Day that have traditionally boosted online shopping sites.
In a post-earnings call, executives said there was early evidence of improvement in Taobao and Tmall group’s gross merchandise volume, or GMV.
“Our strategy focuses on increasing shopping frequency, if we do that we will achieve better GMV growth,” Wu said.
Rival PDD, which owns Pinduoduo and foreign-focused platform Temu, overtook Alibaba to become the most valuable Chinese e-commerce company on Dec. 1 after Morgan Stanley downgraded its cloud business and client management revenue on concerns of a slow turnaround. Alibaba was downgraded.
This quarter, executives also appeared cool about the near-term prospects of public offerings for its Cainiao Logistics and its grocery business Freshippo, saying these IPOs have always been subject to market conditions that currently reflect intrinsic value. Were not in a position to. This business.
Last week, sources told Reuters that Alibaba is trying to sell several consumer sector assets, including Freshippo, which is locked in a price war with Walmart’s subscription chain Sam’s Club, which has led to both sides selling the popular Prices on goods have been cut.
A Freshipow spokesperson has denied reports of a possible sale.
On a call with analysts after earnings, Alibaba Chairman Joe Tsai said it “makes sense” to exit some of the traditional brick-and-mortar retail businesses on its balance sheet, “but it will take time” due to the challenging market conditions.
Alibaba’s International Digital Commerce (AIDC) arm, which operates various retail and wholesale marketplaces including AliExpress and Alibaba.com, performed strongly, with AliExpress orders rising 60% this year.
“There is great potential for AIDC to expand its penetration into many markets,” Jiang Fan, the unit’s chief executive, said on a call with analysts.
Alibaba’s US-listed shares fell nearly 6% as the company’s plan to buy back $25 billion of stock failed to excite investors.
Alibaba’s Hong Kong shares were down 5.4% early Thursday.
The company faces stiff competition from rivals such as Douyin and PDD Holdings, which have changed the e-commerce landscape by selling low-cost and discounted items year-round.
In the biggest restructuring in Alibaba’s 24-year history, the company announced last March that it would split into six units to combat slowing earnings growth. But just a few months later, plans for a spin-off and IPO for the cloud unit were canceled amid uncertainties over US restrictions on exports to China of chips used in artificial intelligence applications.
“Our top priority is to restart the growth of our core businesses, e-commerce and cloud computing,” CEO Eddie Wu said Wednesday. Wu, group CEO since September, directly oversees both the domestic e-commerce arm and Alibaba’s cloud unit.
Alibaba’s net income attributable to common shareholders was 14.4 billion yuan ($2 billion) and net income was 10.7 billion yuan, mainly due to valuation changes from equity investments and losses related to hypermarket operator Sun Art and online video streaming service Youku. Was 77% less.
“They (Alibaba) have indicated that 2024 will be an investment year… so profitability is likely to be lower because of that,” said Bo Pei, analyst at US Tiger Securities.
Taobao and Tmall group revenue grew just 2% in the quarter, including year-end sales events like Singles Day that have traditionally boosted online shopping sites.
In a post-earnings call, executives said there was early evidence of improvement in Taobao and Tmall group’s gross merchandise volume, or GMV.
“Our strategy focuses on increasing shopping frequency, if we do that we will achieve better GMV growth,” Wu said.
Rival PDD, which owns Pinduoduo and foreign-focused platform Temu, overtook Alibaba to become the most valuable Chinese e-commerce company on Dec. 1 after Morgan Stanley downgraded its cloud business and client management revenue on concerns of a slow turnaround. Alibaba was downgraded.
This quarter, executives also appeared cool about the near-term prospects of public offerings for its Cainiao Logistics and its grocery business Freshippo, saying these IPOs have always been subject to market conditions that currently reflect intrinsic value. Were not in a position to. This business.
Last week, sources told Reuters that Alibaba is trying to sell several consumer sector assets, including Freshippo, which is locked in a price war with Walmart’s subscription chain Sam’s Club, which has led to both sides selling the popular Prices on goods have been cut.
A Freshipow spokesperson has denied reports of a possible sale.
On a call with analysts after earnings, Alibaba Chairman Joe Tsai said it “makes sense” to exit some of the traditional brick-and-mortar retail businesses on its balance sheet, “but it will take time” due to the challenging market conditions.
Alibaba’s International Digital Commerce (AIDC) arm, which operates various retail and wholesale marketplaces including AliExpress and Alibaba.com, performed strongly, with AliExpress orders rising 60% this year.
“There is great potential for AIDC to expand its penetration into many markets,” Jiang Fan, the unit’s chief executive, said on a call with analysts.