Alibaba net dives 30pc amid flat growth

Alibaba (9988) saw its adjusted net profit drop 30.4 percent to 30.25 billion yuan (HK$35.16 billion) for its first fiscal quarter ending June while the revenue beat market expectations even though growth was flat for the first time in history.

Shares of the Chinese e-commerce giant in Hong Kong rose more than 5 percent ahead of the earnings report.

Revenue inched down 0.09 percent to 205.56 billion yuan in the quarter. That compared to analysts' average expectation of 203.19 billion yuan, according to Refinitiv data.

Net income attributable to ordinary shareholders for the quarter stood at 22.74 billion yuan, down 49.6 percent from a year earlier.

Customer management revenue, which tracks how much money merchants provide Alibaba for placements and promotions, fell a whopping 10 percent to 80.4 billion yuan. The revenue segment is Alibaba's bread and butter, routinely making up roughly one-third of its total revenue.

"Following a relatively slow April and May, we saw signs of recovery across our businesses in June. Despite near-term challenges, Taobao and Tmall continue to achieve high consumer retention, especially among consumers with higher spending power," the company said in a statement.

China locked down dozens of cities between April and May as the Omicron Covid variant swept through the country

Cloud computing revenue, its main growth driver outside of e-commerce, grew 10 percent.

Its fintech affiliate Ant Group logged a net profit of 11.38 billion yuan in the quarter to March, down 17.3 percent from a year earlier, according to calculations from Alibaba's earnings report.

This came as SoftBank raised as much as US$22 billion (HK$171.6 billion) in cash through the sale of prepaid forward contracts using Alibaba shares, the Financial Times reported, citing filings it has seen.

SoftBank has this year executed the sale of about a third of its Alibaba stake through these contracts, a type of derivatives that allows the Japanese company to raise cash immediately while retaining the possibility of holding on to the shares, the report said.

Separately, Alibaba announced yesterday that Irene Lee Yun-lien, chair of Hysan Development (0014), and Albert Ng Kong-ping, former chairman of Ernst & Young China have been appointed as independent directors on its board. Meanwhile, the city's former chief executive Tung Chee-hwa will not seek re-election after his current term as an independent director ends.