Alibaba’s shares slide down after projecting slowing growth
By MYBRANDBOOK
Alibaba Group Holding shares slide after projecting revenue growth will be slow this year, reflecting post-COVID-19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.
Its stock slid as much as 4% in Hong Kong, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates.
Online shopping began to bounce back from March, executives said. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off pandemic, with consumers still hesitant about spending on big-ticket items.
“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote.
“We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”
Alibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions.
On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.
Chief Financial Officer Maggie Wu said Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”
The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the Coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.
BHIM to join e-commerce, competing with PhonePe and Google Pay
The government-supported payment software BHIM is getting ready to join t...
The latest version of X helps prevent deepfakes on social medi
To combat deepfakes and shallowfakes, Elon Musk revealed a new update t...
India and Namibia collaborate on a payment system similar to U
Once operational, the platform will enable digital transactions in Namibia,...
Sebi issues show-cause notices to six Adani group firms
Sebi issued show-cause notices to six Adani Group firms, including Adani ...
BEETEL TELETECH LTD.
JUVAS SOLUTIONS PVT. LTD.
TATA CONSULTANCY SERVICES
INFOSYS TECHNOLOGIES PVT. LTD.
Technology Icons Of India 2023: Deepinder Goyal
Deepinder Goyal is the Founder and CEO of Zomato. Deepinder, or Deepi,...
Technology Icons Of India 2023: Kumar Mangalam Birla
Aditya Birla Group chairman Kumar Mangalam Birla’s return to Vodafon...
Technology Icons Of India 2023: Natarajan Chandrasekaran
Natarajan Chandrasekaran is the Chairman of the Board of Tata Sons, th...
GSTN aims to integrate indirect tax ecosystem on a shared IT infrastructure
Goods and Services Tax Network (GSTN) has built Indirect Taxation plat...
EESL encouraging e-mobility adoption across India
Energy Efficiency Services Limited (EESL) is a Super Energy Service Co...
TCIL continues to strengthen India with its technology expertise
TCIL undertakes consultancy & turnkey projects in the field of Telecom...
TECH DATA, A TD SYNNEX COMPANY
Tech Data Corporation was an American multinational distribution compa...
BEETEL TELETECH LTD.
: Beetel is one of the oldest and most reputed brands in the Industry,...
NETPOLEON SOLUTIONS
Netpoleon Group is a Value-Added Distributor (VAD) of Network Security...