Alibaba’s share price rebound faces test as quarterly earnings release draws closer

Name: Why China is tightening control over cybersecurity
Uploaded: 2022-02-13T23:30:26.000Z
Duration: 7 min 30 s
Description: Why China is tightening control over cybersecurity

Alibaba’s shares have rebounded 13 per cent after falling to a record low in January

The e-commerce giant may have posted its slowest quarterly revenue growth on record, according to analysts’ consensus estimate

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A woman wearing a face mask walks by the offices of Chinese e-commerce firm Alibaba in Beijing. Photo: AP Photo

Zhang Shidong

Published: 7:30am, 14 Feb 2022

Alibaba Group Holding faces another major test after its shares overcame a roller-coaster ride sparked by speculation about a stake disposal by a big shareholder.

While the stock held up last week after SoftBank Group clarified that the registration of Alibaba’s new American depositary receipts was not meant for divestment, whether it has already bottomed out will largely hinge on the quarterly result due on February 24.

Alibaba’s shares have rebounded 13 per cent in Hong Kong after hitting a record low on January 27. The rough ride last week sent the stock’s 30-day volatility to an all-time high since its listing in the city in November 2019. The stock rose 0.2 per cent to HK$122.40 on Friday.

The earnings will be closely scrutinised by traders who are keen to reset the method of determining the value of Chinese technology stocks after Beijing’s unprecedented regulatory crackdown crimps earnings growth and shrinks valuations. Alibaba, the owner of this newspaper, will be the first major Chinese tech player to release earnings for the quarter ending December, while others such as Tencent Holdings and Meituan are due to release results in March.

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Why China is tightening control over cybersecurity

“The key question now is whether the technology stocks are cheap enough,” said Wang Chen, a partner at Xufunds Investment in Shanghai. “But that will be on a selective basis. We remain positive on the companies operating platforms that offer daily necessities, such as food and clothing.”