Alibaba reported stronger revenues and active users in the March quarter than Wall Street had anticipated, but posted its first losses in nine years due to a massive antitrust penalty.
Shares of Chinese e-commerce giant Alibaba (BABA), which are down 24.3% in the past six months, are down 3.2% in early trading on Thursday (as of this writing) after the company released its fiscal 2021 fourth quarter report. year ended in March.
Good news for Alibaba investors is quarterly revenues rose 64% from the same quarter a year ago to 187.39 billion yuan, or $ 28.6 billion, higher than analysts’ estimates of 180.41 billion yuan.
“Alibaba has reached a historic milestone of one billion annually active consumers worldwide in fiscal 2021,” the company said.
The number of active consumers on Alibaba’s marketplaces in China (customers with at least 1 order in the last year) rose 32 million to 811 million in the 12 months ended March 31.
For the entire 2021 fin. Alibaba’s total revenues grew 41% year on year to $ 109.48 billion, and net income rose 30% to $ 26.25 billion.
In a press release, Alibaba said it has achieved this growth thanks to the strength of China’s consumption economy and accelerated digitalization in all walks of life.
Alibaba’s forecast for the current fiscal year 2022 is revenue growth of 30% to 930 billion yuan.
The negative signal for the fourth quarter of 2021 in the Alibaba report was revenue growth of its cloud computing business slowed to 37% compared to the same period last year, $ 2.6 billion. This was due to the loss of the largest client, whose name Alibaba did not name.
For the entire 2021 fin. year, the Chinese market leader’s cloud revenue grew 50%.
Alibaba’s report saw its first quarterly losses in nine years due to a massive $ 2.75 billion antitrust fine. Contrary to Wall Street’s expectations of 6.95 billion yuan in profit, the company posted a loss of 5.47 billion yuan.
Alibaba’s e-sales growth in calendar year 2020 amid the pandemic has been overshadowed by new antitrust laws in China that took effect last November. In the same month, the record IPO of Ant Group, 33% of which is owned by Alibaba, was suspended by the Chinese authorities. Alibaba’s stock chart shows a sharp decline in November. In December 2020, an official antitrust investigation began against the company.
The drop in Alibaba shares this year was largely due to the entry into force of a law in the United States, according to which Chinese technology companies, whose shares are listed on American exchanges, are subject to delisting if they are not admitted to audit for three years.
Chinese authorities also continue to tighten regulations on the country’s fintech sector, posing risks to both Alibaba’s core business and the media business, adding to uncertainty.
Despite the current challenges, Alibaba intends to continue to invest in its development.
“Given the market potential, our bottom line and our cash flow, we plan to use all of our additional earnings and capital in FY2022 to support our sellers on the platform and invest in new businesses and key strategic directions that will help us increase revenues and expand into new ones. markets, ”said Maggie Wu, Chief Financial Officer of the Alibaba Group.