Ali Baba presented this Thursday the accounts of its first fiscal quarter and, in these, the stagnation of your business due to the coronavirus in China. There is no growth for the first time in the history of the Asian giant, since the income for the period remains at the same level from one year to the next.
The e-commerce company billed $30.689 million from April to June 2022 – its first tax bracket of 2023 – meaning that the interannual variation of their income is nil, at 0%. The figure, yes, exceeds market forecasts. Alibaba’s non-growth contrasts with the company’s performance in the same period a year ago, when its profits were up 34%. Since then until the current quarter, slowdown was reflected in the accounts of the e-commercesince in the three months preceding the current one, from October to December, its turnover increased more moderately, by 9% over one year.
It’s quarters, Alibaba has been plagued by the coronavirus in China. To give just one example, in Shanghai, the quarantine ended on June 1, which means that just two months ago, part of the country was still paralyzed. The company explained that the confinements affected its activity, in particular in April and May, with a return to purchases in the last part of the quarter. “We saw signs of recovery in June,” CEO Daniel Zhang said.
In fact, online sales in China, his local business, are down 1%. Meanwhile, its international division charged 2% more (accounts for 7% of total profits). On a positive note, its main market, China, continues to contribute the majority of revenue, 69%. All this despite the restrictions, which means that Alibaba was able to contain the situation.
The firm’s brighter outlook for the rest of the year and the fact that it beat market expectations drives Alibaba up nearly 5% in the premarket. In Hong Kong, where it is also listed, it closed the session among the best performers, with an increase of more than 5%.
In these three months, what offset the negative impacts in Alibaba’s accounts has been the cloud. Revenue for this division increased by 10% year-on-year. However, its net profit fell 53% from the same period a year earlier.
“Last quarter, we have adapted to macroeconomic changes and we focused on our long-term strategy. We are confident in our growth opportunities, our customer base, our resilience and our diversified business,” Zhang said.
During the quarter, the company benefited from buy back treasury shares, more than 38.5 million titles for an amount of 3,500 million dollars.
Softbank cuts its bet on Alibaba
Alibaba has had a turbulent 2022, amid tech sector hardest hit by monetary policy tightening and portfolio rotation from growth Al assess. The company has a negative return of 21% so far this year, with which it loses a fifth of its value. And that the price is recovering from the yearly lows that touched in March.
This pool led one of its main investors, SoftBank, to reduce its exposure to Alibaba. According FinancialTimesMasayoshi Son’s firm sold a third of its stake in e-commerce through derivative transactions with whom he raised $22 billion. Even so, the investor still has the option of performing or not performing these sales contracts.
