Once the most valuable company in China, Alibaba has struggled since Beijing launched a sweeping crackdown on the private sector more than a year ago. The Chinese government forced Alibaba’s finance affiliate, Ant Group Co., to call off what would have been the world’s largest initial public offering in 2020, and then instituted a series of reforms that have undercut Alibaba’s business model.
Alibaba’s shares climbed less than 1% in pre-market trade. Annual active consumers rose 43 million to a better-than-expected 1.28 billion while cloud revenue jumped 20%.
Some analysts had expected the Chinese internet giant to again reduce its forecast for annual revenue, given weakening consumption and an uncertain regulatory environment.
The company warned in November that revenue growth for the fiscal 2022 year would be 20% to 23%, compared with the 27% that analysts had been projecting. Its valuation has dropped from a high of about US$860 billion to US$291 billion. In a sign of the times, liquor maker Kweichow Moutai Co is now worth more than Alibaba.
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Beijing’s crackdown isn’t over. Bloomberg News reported this week that Chinese authorities are asking the nation’s biggest state-owned firms and banks to start a fresh round of checks on their financial exposure and other links to Ant Group, according to people familiar with the matter. Meanwhile, market volatility has eclipsed Alibaba’s efforts to seek growth outside China. The company recently called off a fund-raising plan for its Southeast Asian retail arm after failing to secure an envisioned valuation.
Photo: Bloomberg
