Alibaba shares surge on buyback plan, signs of covid easing
CHINA: Alibaba Group Holding Ltd. shares rose after the Chinese e-commerce giant unveiled a new buyback plan and suggested covid-19 restrictions are beginning to ease enough to benefit its business.
The stock was up as much as 6.4% in Hong Kong trading on Friday morning.
Alibaba reported a surprise net loss for the quarter as it marked down investment holdings, but it offered investors support on other fronts. The company approved a $15 billion expansion to an existing $25 billion buyback program while extending the duration to 2025. Executives also expressed optimism about the eventual lifting of pandemic restrictions.
“With the introduction of the 20-point pandemic measures from the state authorities, that can be expected to have a positive impact. We certainly do note still some disruption to logistics in certain regions of the country,” Chief Executive Officer Daniel Zhang told analysts on a post-earnings conference call.
“But overall we do expect things to continue to improve in a positive direction,” Zhang said.
China’s e-commerce leader reported a net loss of 20.6 billion yuan ($2.9 billion) versus projections for a profit of almost the same amount, after it marked down the value of
investments across a portfolio that includes Didi Global Inc. and Indonesia’s Goto. Adjusted Ebitda did rise 24% for the quarter, a metric analysts at Jefferies highlighted as a sign of progress.
“We consider it is in a sweet spot to embrace the reopening story ahead, thanks to its huge and engaging user base with the pursuit of successful customer segmentation strategies coupled with wide product selections,” the analysts at Jefferies wrote.
Revenue rose a slightly lessthan-expected 3% to 207.2 billion yuan in the September quarter, after cloud sales -- the company’s biggest growth driver in recent times -- notched its slowest-ever pace.