Net profit fell 77 per cent to 10.7 billion yuan (US$1.5 billion) in the three months ended December 31, the company announced on Wednesday after the close of trading in Hong Kong. That was lower than the 38.16 billion yuan consensus estimate from analysts surveyed by Bloomberg.
Revenue rose 5 per cent to 260.35 billion yuan in the quarter, missing the consensus analysts’ estimate of 261.25 billion yuan, and slower than the 9 per cent growth seen in the September quarter. Alibaba owns the South China Morning Post.
Alibaba said it had approved an increase of US$25 billion in its share repurchase program through the end of March 2027. Following this increase, the e-commerce company will have US$35.3 billion available under the scheme through the next three financial years.
Alibaba’s DingTalk among Chinese apps launching on Apple Vision Pro
Alibaba’s DingTalk among Chinese apps launching on Apple Vision Pro
Alibaba chief executive Eddie Wu Yongming said in a statement that the company’s performance last quarter was “solid”, as it executed “focused strategies across the organisation”.
“Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing,” he said.
Alibaba shares closed down 1.45 per cent at HK$74.90 on Wednesday in Hong Kong, ahead of the quarterly earnings release.
Alibaba said the year-on-year profit drop was primarily due to losses from its equity investments and the impairment of intangible assets at hypermarket Sun Art and impairment of goodwill at its video platform Youku.
Under non-generally accepted accounting principles (GAAP) accounting standards, Alibaba’s net income dropped 4 per cent year-on-year to 47.95 billion yuan in the December quarter.
For the quarter, its core e-commerce unit Taobao and Tmall Group achieved revenue of 129.07 billion yuan, growth of 2 per cent year-on-year. Online gross merchandise volume achieved healthy growth year-on-year, with the number of transacting buyers and order volume growing strongly, partly offset by a decrease in average order value, according to Alibaba’s statement.
Revenue from the Cloud Intelligence Group was 28.06 billion yuan, up 3 per cent year-on-year. Alibaba said it is continuing to improve revenue quality by reducing sales from low-margin project-based contracts.
Alibaba is still in the midst of a sweeping restructuring to break its business empire into six major units and several small businesses, as it battles increased competition from the likes of PDD Holdings, which operates Pinduoduo in China and Temu overseas.
It has faced some setbacks, putting on hold its listing plan for supermarket chain Freshippo as the company evaluates “market conditions” and terminating the US$12 billion planned IPO of its cloud business. However, it is still pushing ahead with the planned listing of its logistics unit Cainiao on the Hong Kong stock exchange, expected later this year.
