Despite the loss, China’s leading e-commerce platform posted 2022 revenue that exceeded market targets, betting that the pandemic shift in online shopping will continue to be strong.
China’s leading e-commerce platform Alibaba Group Holding Ltd on Thursday posted its first three-month loss of operations from publication in 2014 due to the market regulator’s record anti-monopoly fine. nasud.
Shares listed in the United States fell nearly 3 percent in choppy trading, even as the company estimates strong earnings by 2022, betting that the coronavirus-driven shift to online shopping will continue to be strong.
However, the outlook was overshadowed by a regulatory crackdown by China that led to the suspension of a $ 37bn initial public offering to its partner Ant Group and a $ 2.8bn fine in April for counter- competitive business practices.
The fine that caused 7.66 billion yuan ($ 1.19bn) in operating losses in the fourth quarter ended on March 31.
“The Penalty Decision encourages us to reflect on the relationship of a platform economy and society, as well as our social responsibilities and commitments,” Chief Executive Daniel Zhang said in a revenue call.
Alibaba estimates annual revenue of 930 billion yuan ($ 144.12bn) for the year ending March 2022, more than the expected 928.25 billion yuan.
Core commerce revenue rose 72 percent to 161.37 billion yuan ($ 25bn) in the fourth quarter. But growth in its cloud computing unit slowed to 37 per cent to 16.8 billion yuan ($ 2.60bn) from 58 per cent a year earlier, it was the weakest since at least 2016.
Alibaba reported that it was due to a leading customer with a “substantial presence outside of China” ending its business due to “unrelated factors.”
Total revenue rose 187.4 billion yuan ($ 29.03bn) in the fourth quarter, topping a Refinitiv forecast of 180.41 billion yuan ($ 27.95bn).
U.S.-listed shares on Alibaba fell more than 30 percent from hitting a record high at the end of October when its founder Jack Ma delivered a speech in Shanghai criticizing the financial regulator in China.
The sinking share price reflects investor concern over regulation, said Brock Silvers, chief investment officer at Hong Kong-based Adamas Asset Management.
“The company is facing violent waves of regulatory risk, which are now threatening the entire technology sector.”