Chinese e-commerce giant Alibaba Group Holding Ltd. posted revenue growth on stronger retail and cloud-computing results in the latest quarter, but a large fine levied by the Chinese government dragged the company to a quarterly loss.
Alibaba’s sales rose to 187.4 billion yuan, or about $28.6 billion, from 114.31 billion yuan in 2020’s comparable quarter. Analysts were forecasting sales of 180.2 billion yuan, according to FactSet.
A large fine imposed by China’s top market regulator after an investigation into anticompetitive practices weighed on the company’s bottom line. After the fine of 18.23 billion yuan, or roughly $2.78 billion, Alibaba posted a net loss of 1.99 yuan per American depository share, or about 30 cents per ADS, compared with earnings of 1.16 yuan per ADS in the year-ago quarter.
According to the antitrust regulator, an investigation launched in December found that the company punished some merchants who sold goods both on Alibaba and on rival platforms, a practice known as "er xuan yi"— "choose one out of two."
Beijing officials have continued to take a hard-line stance against China’s tech giants. Last month, nearly three dozen Chinese tech companies made vows to comply with the country’s antimonopoly laws.
Since the investigation concluded, Alibaba has taken steps to court merchants, cutting fees and making it easier for them to open stores on its e-commerce platforms. The company also said it would invest in improved technology and tools for its vendors, which could further dent profitability as it fends off encroaching e-commerce rivals.
In the quarter that ended in March, revenue from Alibaba’s core commerce segment grew to 161.37 billion yuan, from 93.87 billion yuan in 2020’s equivalent quarter. Cloud-computing revenue improved to 16.76 billion yuan, from 12.22 billion yuan in the prior-year period.
For the 12 months that ended in March, annual active customers on Alibaba’s Chinese retail marketplaces grew to 811 million, an increase of 32 million above the 2020 calendar year.
Alibaba Chief Financial Officer Maggie Wu said that the company expects to record revenue of more than 930 billion yuan, or about $144.04 billion, in the 2022 fiscal year. That outlook topped the 925.31 billion yuan estimate that analysts had arrived at, according to FactSet.
Ant Group Co., Alibaba’s financial-technology affiliate, had an estimated profit of 21.8 billion yuan, equivalent to $3.4 billion, in the quarter ended Dec. 31. During that period, Chinese regulators forced Ant to call off a blockbuster initial public offering that had been on track to be the world’s largest stock sale.
Ant’s profit numbers, which were based on The Wall Street Journal’s calculations from Alibaba’s earnings, reflected approximately 41% growth from the same period a year ago. Alibaba owns a third of Ant and reports its share of profits from the online-payments giant one quarter in arrears.
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