Dow Jones Newswires: Alibaba shares fall in Hong Kong as selloff continues

by | May 18, 2023 | Stock Market

Alibaba Group shares
9988,
-5.47%
fell in Hong Kong trade, extending overnight losses on Wall Street, after the Chinese e-commerce giant’s latest quarterly revenue growth missed some analysts’ expectations. The stock has lost as much as 5.9% and was last down 5.1%.

The selloff came after Alibaba posted a 2% revenue increase for its fourth quarter ended March, missing some analysts’ expectations, as China’s post-reopening consumption recovery proved softer than hoped for. Analysts also noted a cautious tone from the company’s management during its earnings call. “Amid intensified competition, Taobao and Tmall will step up investment in user acquisition and retention, merchant servicing and product upgrade,” Citi analysts said in a note following the earnings release. They also noted Alibaba’s plans to increase spending to strengthen market position in international e-commerce operations and offer price discounts for cloud services. “These changes imply uncertainty in short-term growth and margins,” the Citi analysts said, but added that they are “important for long-term success.” On the same day, Alibaba also unveiled plans to spin off and separately list several business groups, including its logistics operations, grocery chain and AliCloud, its cloud-intelligence group. “This full spinoff plan involving AliCloud is both bold and puzzling, in our view,” Nomura analysts said. “First, we think investors will appreciate that the company is taking proactive moves to return value to shareholders,” they said. But “AliCloud is Alibaba’s organic business and is still deemed as one of the long-term drivers for the group even …

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