Alibaba’s stock jumped in Hong Kong after the Chinese e-commerce giant reported record transactions on its digital platform even as the resurgence of Covid-19 infections battered the world’s second-largest economy.
The company—which counts Japanese billionaire Masayoshi Son’s SoftBank as its biggest shareholders—said net profit in the full year ended March 31 dropped to 62 billion yuan ($9.2 billion), the lowest in five years, from 150.3 billion in the previous year. Still, Alibaba shares jumped more than 12% in morning trading in Hong Kong, continuing its rebound from record lows seen in March. The shares have been on a steep decline since Beijing launched a sweeping crackdown on some of its biggest homegrown tech companies.
“Despite macro challenges that impacted supply chains and consumer sentiment, we continued to focus on customer value proposition and building the capabilities to deliver value,” Daniel Zhang, chairman and CEO of Alibaba Group, said in a statement. “We saw tangible progress across our businesses, especially in operational improvements in key strategic areas.”
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Zhang said gross merchandise value on the group’s e-commerce platform climbed to a record 8.3 trillion yuan for the year from 7.5 trillion yuan, driven by strong demand from Alibaba’s 1.3 billion active users across China and international markets. The surge in transactions helped drive the firm’s full year revenue 19% higher to 853 billion yuan.
“Looking ahead to fiscal year 2023, we will firmly focus on generating sustainable, high-quality revenue growth and optimizing our operating cost structure to enhance overall return amidst these uncertain times,” said Alibaba Chief Financial Officer Toby Xu.
Alibaba was cofounded by billionaire Jack Ma, a former English teacher who built the company into the world’s largest e-commerce platform, which he listed in New York in 2014 in what was then billed as the world’s largest IPO, having raised $25 billion. Ma stepped down as Alibaba’s executive chairman in September 2019, and just over a year later Chinese regulators blocked Ant Group’s IPO and launched a sweeping crackdown on the tech industry. Ma has a net worth of $23.6 billion, according to Forbes’ real-time data.
