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Tuesday, June 22, 2021

Alibaba records first quarterly operating loss since IPO

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China’s largest e-commerce company Alibaba has recorded its first quarterly operating loss since it went public in 2014 after Beijing slapped a record 2.8 billion dollar (£2 billion) fine on the firm for abusing its market position.

The loss tied to the anti-monopoly fine was 7.66 billion yuan for the quarter that ended in March, though revenue growth was 64%, reaching 187.4 billion yuan.

At the opening bell on the New York Stock Exchange on Thursday, shares tumbled more than 6%.

Authorities launched an investigation into Alibaba last year and abruptly halted the 37 billion dollar (£26 billion) initial public offering of shares from its financial affiliate Ant Group as Beijing grew increasingly concerned over the growing influence of technology giants in China.

Beijing has fined multiple technology firms over antitrust violations and has since launched a probe into Alibaba rival Meituan over suspected anti-competitive behaviour.

“We have stated that we accept the penalty with sincerity and will ensure our compliance with determination,” said Alibaba chairman and chief executive Daniel Zhang in an earnings call.

“The penalty decision motivated us to reflect on the relationship between a platform economy and society as well as our social responsibilities and commitments,” he said.

The company said it expects revenue in this fiscal year, which ends in March 2022, to grow by more than 30%, reaching over 930 billion yuan.

That is better than most industry analysts are expecting.

It also reported a total of 811 million annual active users for the quarter ending in March.

Alibaba Group Holding’s New York-listed stock has fallen 14% since Beijing announced its investigation into the company.

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