Alibaba stock price falls after earnings shortfall – WWD

SHANGHAI–Alibaba Shares fell 10.7% in Hong Kong trading on Friday as the company cut guidance and saw earnings fall for the quarter.

It followed a similar drop of 11.3% in New York shares the previous day.

Alibaba said on Thursday that net profit fell 81 percent in the quarter to September 30 and it missed expectations as it grapples with a slowing economy in China and an antitrust crackdown. . The company had previously told investors it expected to bring in 930 billion yuan for the year, just under 30% year-on-year growth, but instead slashed its forecast. down from 20 to 23%.

Alibaba’s core commerce business saw revenue grow 31% year-on-year to 171.17 billion yuan, also falling short of expectations.

“We recorded a single digit physical commodity GMV year over year growth, mainly due to slowing market conditions and more players in the Chinese e-commerce market,” the company said in its earnings release. “Via categories, physical goods GMV growth was slower in apparel and accessories, but continued resilience in the consumer electronics and home furniture sectors. ”

Alibaba recently ended its Singles Day sale on November 11, the biggest retail event of the year according to the Chinese calendar. While it grossed $84.54 billion during the sales period, up 8.5% year over year, it was much slower than the 26% increase it announced last year as newcomers engaged in e-commerce as Douyin competed for market share.

Daiwa Capital Markets analyst John Choi commented that he anticipates strengthening competition will continue to infiltrate Alibaba‘s market share.

“While Alibaba was hit by the macro downturn in GMV gr clothes and accessoriesowth, it Equalstrongly observed opposite Choi wrote in a report, such as JD.com.

“We look forward to the ramp–up of e-commerce business other entertainment platforms to monetize their user traffic is could be another reason, as shopping scenarios for Chinese people Choi said. “While we still believe that Alibaba there is an economic moat in China‘e-commerce space due to strong thoughts of users, the market should reset such expectations that Alibaba‘s GMV will largely grown is parallel to macro due ratio.”

Competitor JD.com also reported quarterly earnings on Thursday with net sales of 218.7 billion yuan, or $33.9 billion, up 25.5 percent year-on-year. last year. The numbers beat expectations, driving its NASDAQ-listed stock up nearly 6%.

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Alibaba’s Strength on Singles’ Day, and China’s E-Commerce in general, has loosened