Investors were disappointed with Alibaba Group’s (HK:9988) quarterly earnings report on Friday, sending the Hong Kong-listed shares of the e-commerce giant tumbling more than 5%. The firm logged revenue of RMB208.20 billion for the three months to March 31, lower than analyst estimates of RMB210.3B. Its revenue for the year to March 31 also rose just 2% to RMB868.69B, its worst pace of growth since the company listed in 2014.
The stock took little support from Alibaba saying that it will spin off and list its cloud unit within the year. While Chinese consumer spending rose somewhat this year, it still remained well below pre-COVID levels. But it still helped Alibaba log a net profit of RMB23.52B for the year, compared to a loss of RMB16.24B last year.
The firm also faces a brewing price war in its cloud business with rival Tencent Holdings Ltd (HK:0700), amid weak corporate demand and excess capacity in the space. Alibaba is also attempting to break into the generative artificial intelligence space with its Tongyi Qianwen model.
The broader Hong Kong Hang Seng index fell 1.1% on Friday, as losses in Alibaba spilled over into other heavyweight technology stocks.