The buyback program will last until the end of March 2027 (representative)
Chinese e-commerce giant Alibaba Group announced on Wednesday it would increase its stock buyback program by $25 billion as it reported disappointing quarterly results.
Alibaba said in a statement that sales in the quarter ended March 31 were 260.3 billion yuan ($36.7 billion), up 5% year-on-year but below analysts’ forecasts.
The leading technology company faces fierce competition from rivals such as JD.com, Pinduoduo and Chinese version of video app Douyin.
The announcement stated that Alibaba’s net profit in the first quarter (October-December) was 14.4 billion yuan, a year-on-year decrease of 77%.
“Our board of directors approved an increase in our stock repurchase program of $25 billion, demonstrating our confidence in our business and cash flow prospects,” Chief Financial Officer Toby Xu said in a statement.
The group said the buyback program will last until the end of March 2027.
According to Bloomberg, the company’s existing buyback program is already one of the largest in China, reaching about $9.5 billion last year alone.
Wednesday’s unexpected announcement caused a stir in the market, with Alibaba’s U.S.-listed shares rising more than 5% before the market opened.
The group is a pioneer in online shopping in China and is listed in New York and Hong Kong.
Alibaba, based in Hangzhou in eastern China, is a major player in China’s digital industry and is considered a barometer of consumer spending in the world’s second-largest economy.
Restructuring frustrated
China’s economy is still struggling to recover from the country’s strict zero-COVID health policy, which it scrapped in late 2022.
Disappointing sales figures disclosed by Alibaba on Wednesday added to uncertainty for the group, which has endured a tumultuous 2023 as major restructuring plans face setbacks.
In November, the company announced it was scrapping plans to spin off its cloud computing business due to U.S. restrictions on computer chips.
The United States has expressed its desire to restrict Chinese companies’ access to cutting-edge technology on the grounds of national security, especially restricting the export of semiconductors to China.
After Chinese Prime Minister Li Qiang denounced “discriminatory” trade barriers as a threat to the global economy, U.S. national security adviser Jake Sullivan said last month that Washington’s restrictions on China’s advanced chips were to safeguard security rather than disrupt commerce. action against the United States.
In addition to e-commerce and cloud services, Alibaba Group is also active in logistics, media, entertainment and artificial intelligence.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
