Alibaba sinks 5.4b yuan in the red

China’s top e-commerce platform Alibaba, yesterday reported its first quarterly operating loss since going public in 2014 due to a record anti-monopoly fine.

Its US-listed shares fell more than 3 percent in volatile premarket trading, even as the company forecast 2022 revenue above market expectations, betting that the broader pandemic-driven shift to online shopping will remain resilient.

But the strong outlook was overshadowed by a regulatory crackdown that resulted in the suspension of a US$37 billion (HK$288.6 billion) IPO of its affiliate Ant Group and a US$2.8 billion fine for anti-competitive business practices.

The fine by China’s markets regulator in April was the largest-ever of its kind.

Alibaba forecast annual revenue to be 930 billion yuan (HK$1.12 trillion) for the fiscal year ended March 2022, above analysts’ average estimate of 928.25 billion yuan.

It posted a net loss attributable to ordinary shareholders of 5.48 billion yuan, or 1.99 per American depository share, mainly due to the anti-monopoly fine.

Excluding items, Alibaba earned 10.32 yuan per ADS, below expectation of 11.11 yuan.

Core commerce revenue rose 72 percent to 161.37 billion yuan in the quarter, powered by the company’s China retail marketplaces and ongoing consumer adoption of e-commerce in the wake of the pandemic.

Revenue rose to 187.4 billion yuan in the three months ended March 31, higher than 180.41 billion yuan forecast by 30 analysts compiled by Refinitiv.

Alibaba’s US listed shares have fallen more than 30 percent since hitting a record high in late October when its founder Jack Ma delivered a speech in Shanghai criticizing China’s financial regulators.

Ant Group’s profit rose to US$3.4 billion in the December quarter after Chinese regulators thwarted its record initial public offering and told it to scale back its sprawling business.

Billionaire Jack Ma’s fintech giant contributed nearly 7.2 billion yuan to Alibaba Group’s earnings, a company filing showed yesterday. Based on Alibaba’s one-third stake in Ant, that translates to 21.8 billion yuan in profit, up 50 percent from 14.5 billion yuan in the previous three months. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.

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