Alibaba net declines 21pc but lockdown sales jump

Alibaba (9988) reported a 21 percent decline in adjusted net profit to 136.39 billion yuan (HK$158.97 billion) for the year ending in March but its last quarter's sales beat expectations after Chinese consumers turned to online malls for basic needs during Covid lockdowns across the country.

Revenue for the last fiscal year rose 19 percent to 853.06 billion yuan, primarily driven by the revenue growth of the China commerce segment, the e-commerce giant said yesterday.

Its cloud segment saw a 23 percent year-over-year growth to 74.57 billion yuan and the international commerce segment climbed by 25 percent to 61.08 billion yuan from an earlier year.

The company, however, said it would not issue a forecast for the new fiscal year, citing pandemic-related risks and uncertainties.

For the last quarter, Alibaba's revenue rose 9 percent to 204.05 billion yuan. Analysts on average had expected revenue of 199.25 billion yuan.

Like rival Tencent (0700), Alibaba is responding to a new era of sharply lower growth brought on by relentless Beijing scrutiny. It said in February it'll focus on retaining users rather than pursuing the aggressive market-share grab of years past.

Its net loss widened in the quarter to about 16.2 billion yuan, after the value of its investments fell. Alibaba's annual active users in China surpassed the 1 billion mark, with a total of 1.31 billion annual active users as of March.

Ant Group, Alibaba's fintech affiliate, reported a 1.3 percent rise in profit to about 22 billion yuan for the December quarter.

Meanwhile, Chinese search engine giant Baidu's (9888) adjusted net profit slid by 10 percent to 3.88 billion yuan in the first three months but was well above the estimate of 1.77 billion yuan. Revenue rose 1 percent to 28.41 billion yuan, the slowest growth in six quarters, but topped an analysts' average estimate of 27.82 billion yuan.

Sales for Baidu Core, which provides mainly online marketing services and products from its AI initiatives, rose 4 percent to 21.38 billion yuan

Sales from Baidu AI cloud, its public cloud service and one of the company's fastest-growing units, jumped 45 percent.

"Since mid-March, our business has been negatively impacted by the recent Covid resurgence in China," founder and chief executive Robin Li Yanhong said, adding that challenges related to the virus will continue to pressure its operations in the near term.