Chinese e-commerce firm Alibaba Group Holding Ltd (阿里巴巴) on Wednesday approved an additional US$25 billion authorization to its share buyback program, after reporting lower-than-expected sales revenue for the final quarter of last year.
The company’s Hong Kong-traded shares plunged 6.8 percent yesterday. Alibaba’s New York-listed stock price sank 5.9 percent on Wednesday and has fallen nearly 26 percent over the past year.
Alibaba posted a 5 percent annual increase in sales to 260.3 billion yuan (US$36.35 billion) in the quarter that ended in December last year, slightly missing analysts’ estimates. Net income sank to 14.4 billion yuan, down 77 percent compared to a year earlier.
Photo: Bloomberg
The Hangzhou, China-based firm attributed the drastic decrease to declining values of its equity investments and falling revenues.
Alibaba has struggled to sustain its growth and faces increasing competition in the e-commerce sector from rivals such as PDD Holdings Inc (拼多多), which operates Pinduoduo, and ByteDance Ltd (字節跳動), which runs both TikTok and Douyin (抖音).
On a call with analysts, Alibaba chairman Joseph Tsai (蔡崇信) said that the company no longer plans to list shares in its logistics unit Cainiao Smart Logistics Network Ltd (菜鳥網路) and its Freshippo (盒馬鮮生) grocery business unit, given “challenging market conditions.”
Earlier, the group scrapped plans to spin off its cloud business, citing uncertainties over US export curbs on advanced chips used for artificial intelligence.
Alibaba is looking to sell off some of its non-core holdings, including several retail operations, he said.
“We have a number of traditional physical retail businesses on our balance sheet, and these are not our core focus,” Tsai said.
The company initially restructured its businesses in March last year, splitting them into six units that would eventually raise their own capital and go public to improve shareholder value.
Trying to rev up its growth, in December last year Alibaba named current chief executive officer Eddie Wu (吳泳銘) as the new head of its e-commerce business, replacing longtime Alibaba executive Trudy Dai (戴珊). That came weeks after rival PDD surpassed Alibaba in market value.
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