Alibaba set to report steady growth in third quarter, bolstering investor confidence after rough two years

Analysts expect improved performance from Alibaba last quarter after two years of investigations, geopolitical tension, and a rough economic climate at home

Expected growth of about 4 per cent is far from the double digits Alibaba used to report, but it is taken as a good sign amid flagging consumer confidence

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A woman walks past the offices of Chinese e-commerce firm Alibaba in Beijing on December 13, 2021. Photo: AP

Tracy Quin ShanghaiandAnn Caoin Shanghai

Published: 6:00pm, 15 Nov 2022

E-commerce giant Alibaba Group Holding is expected to report steady revenue growth for the previous quarter, analysts said, possibly shoring up investor confidence after two years of being battered by Beijing’s scrutiny of Big Tech and the US-China tech war.

Once the poster child for China’s technological success, growing from the country’s dominant e-commerce player into a major provider of cloud computing and other services, Alibaba has faced a crisis of confidence from investors since its fintech affiliate Ant Group was forced to scrap what would have been the world’s largest IPO in 2020. A month later, authorities opened an antitrust probe against Alibaba.

Since then, Alibaba’s stock price in Hong Kong has fallen to about HK$80 (US$10.20), down more than 70 per cent from its peak of HK$307 in October 2020.

But there are signs that external headwinds for Alibaba may have come to an end: China has started to relax certain Covid-19 controls, which could boost domestic consumer spending; Beijing relaxed its campaign cracking down on Big Tech firms; audits by US regulators, an uncertainty hanging over US-listed Chinese firms, have been conducted; and Ant Group has completed capital base expansion for consumer credit.

The days of 30 per cent annualised revenue growth are likely over for Alibaba, but a report reflecting solid business performance expected on Thursday could assure investors that the company remains a safe bet for tapping into China’s consumer market and the future of its technology sector, analysts said.

Alibaba owns the South China Morning Post.

“A positive revenue growth in the September quarter should not be a hard thing for Alibaba. Even though the actual results may not go beyond expectations, it is likely to return to a growth track,” said Carmen Zhu, a senior analyst at research firm Leadleo.

Alibaba’s revenue for the quarter ended September is estimated to have reached 209.2 billion yuan (US$29.6 billion), a 4.3 per cent increase from the same period last year, according to a Bloomberg survey. Adjusted net income may fall 4 per cent.

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