Alibaba approves additional $25 billion in stock buybacks after earnings disappoint

Chinese e-commerce company Alibaba Group Holding Ltd on Wednesday approved an additional $25 billion in authorization for a stock buyback program after reporting lower-than-expected sales revenue for the fourth quarter of 2023. The company’s Hong Kong-listed shares plunged 6.8% Thursday. Alibaba’s New York-listed shares fell 5.9% on Wednesday and have fallen nearly 26% in the past year.

Alibaba reported sales rose 5% to 260.3 billion yuan ($36.67 billion) in the quarter ended December, slightly below analysts’ expectations. Net profit fell to 14.4 billion yuan ($2 billion), down 77% year-on-year. The Hangzhou, China-based company attributed the sharp decline to the decline in the value of its equity investments and lower revenue. Alibaba has struggled to sustain its growth and faces growing competition in e-commerce from rivals such as Pinduoduo and ByteDance, which operates TikTok and Douyin.

Alibaba Chairman Joe Tsai said on a conference call with analysts that the company no longer plans to list shares in its logistics unit Cainiao and Hema Fresh business units, given challenging market conditions. Earlier, the group scrapped plans to spin off its cloud business, citing uncertainty over U.S. export restrictions on advanced chips used in artificial intelligence.

He said Alibaba is looking to sell some non-core assets, including several retail businesses. “We have a lot of traditional brick-and-mortar retail businesses on our balance sheet, and those are not our core focus,” Tsai said.

The Hangzhou-based company initially restructured its business in March, splitting it into six divisions and will eventually raise its own capital and go public to boost shareholder value. To accelerate growth, Alibaba in December named current CEO Eddie Wu as the new head of its e-commerce business, replacing longtime Alibaba executive Trudy Dai. A few weeks ago, the market capitalization of rival Pinduoduo, which operates Pinduoduo, surpassed that of Alibaba.

The company has struggled to recover after a regulatory crackdown on China’s technology industry, which forced it to pay a $2.8 billion fine for violating antitrust regulations.

(This story has not been edited by News18 staff and is published from Yonhap News Agency-The Associated Press)