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.
Singapore to remove One-Time Passwords from Bank Accounts
According to the Monetary Authority of Singapore, clients who utilise secur...
Is 375 million Airtel subscribers database breached?
When a hacker claims to have accessed and put up for sale a customer databa...
The government of India intends to construct a single portal f
A single portal will be launched by the Indian government to list all of it...
OpenAI offers GPT-4o, a faster model available to all users at
GPT-4o, a faster and more sophisticated AI model, is made available to all...
Icons Of India : Deepak Sharma
Deepak Sharma spearheads Schneider Electric India. He brings with him ...
Icons Of India : ALOK OHRIE
Alok Ohrie leads Dell Technologies’ India business, overseeing Sales...
Icons Of India : Dr. Sanjay Bahl
Dr. Sanjay Bahl has around four decades of experience in the ICT indus...
STPI - Software Technology Parks of India
STPI promotes and facilitates the growth of the IT and ITES industry i...
C-DOT - Center of Development of Telematics
India’s premier research and development center focused on telecommu...
CERT-IN - Indian Computer Emergency Response Team
CERT-In is a national nodal agency for responding to computer security...
Indian Tech Talent Excelling The Tech World - Sundar Pichai, CEO- Alphabet Inc.
Sundar Pichai, the CEO of Google and its parent company Alphabet Inc.,...
Indian Tech Talent Excelling The Tech World - JAY CHAUDHRY, CEO – Zscaler
Jay Chaudhry, an Indian-American technology entrepreneur, is the CEO a...
Indian Tech Talent Excelling The Tech World - George Kurian, CEO, Netapp
George Kurian, the CEO of global data storage and management services ...