Alibaba reports slowest growth yet amid COVID-19 outbreaks

HONG KONG (AP) — Alibaba Group Holding Ltd. on Thursday reported a single-digit increase in its fourth-quarter revenue, its slowest quarter yet as its online services and e-commerce businesses took a hit amid COVID-19 lockdowns across China.

Revenue increased 9% to 204.05 billion yuan ($30.3 billion) in the three months ended March, as its core e-commerce platforms Taobao and Tmall suffered from disruptions in supply chain and logistics and a dip in demand due to COVID-19 outbreaks in March, the company said.

The single-digit increase in revenue paled in comparison to the 64% increase in revenue growth during the same quarter last year.

But Alibaba’s sales growth still exceeded analyst estimates, and its New York-listed shares were up more than 9% in early trading.

Executives said that Alibaba reached 1.31 billion annual active consumers on its platforms over the fiscal year, with over 1 billion Chinese users for the first time.

The company reported a net loss attributable to shareholders of 16.24 billion yuan ($2.4 billion), more than triple the same time last year, driven primarily by decreases in the market prices of Alibaba’s equity investments in publicly-traded companies.

Excluding investment-related losses and other items, the quarterly profit totaled 7.95 yuan ($1.25) per American depository share, down 23% from last year.

Alibaba also said that it would not issue a forecast for the fiscal year, stating uncertainties around the pandemic.

Growth at some of China’s biggest technology firms have slowed amid a regulatory crackdown and COVID outbreaks across the country that have led to lockdowns and strict COVID-19 control measures in major cities like Shanghai.

China’s largest games firm Tencent last week reported its worst quarterly profit decline and missed revenue estimates as sales grew just 0.1% compared to a year earlier. Search engine and artificial intelligence firm Baidu said Thursday that its quarterly revenue grew 1% compared to the same time last year.

Alibaba’s e-commerce rival JD.com last week reported an 18% increase in revenue, less than half of the growth it experienced during the same time last year.

But regulatory pressures on Chinese technology companies may ease after over a year of regulatory crackdowns, during which fines were doled out for antitrust violations and regulators tightened their scrutiny of how tech firms operated.

Last week, Chinese vice premier Liu He said China would support technology companies looking to list both domestically and overseas, and would support the development of the platform economy in a healthy manner.

The prolonged crackdown had hit publicly-traded Chinese technology companies hard, with billions shaved off their market value. Alibaba’s U.S. stock price has slid some 61% over the past year.

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