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Alibaba shares: 3 factors to consider ahead of Q4 results

China’s faltering economy, strained Sino-American political relations, and a costly European growth strategy are all affecting the e-commerce giant.

Alibaba (NYSE: BABA) shares have fallen by 74% from their record $310 in mid-October 2020 to a mere $82 today.

And reporting Q4 results tomorrow, the Chinese giant’s share price could have further to fall.

Alibaba share price: 3 factors to consider

1) China’s economic woes

After years of growth, China could be in trouble. Retail sales fell by 11.1% in April compared to a year ago, industrial output was down 2.9%, and the unemployment rate in China’s 31 largest cities rose to a high of 6.7%.

Worryingly, China’s Passenger Car Association reported passenger car production fell by an incredible 41.1%, with the auto sector accounting for one-sixth of Chinese jobs and 10% of retail sales.

The National Bureau of Statistics noted the ‘increasingly grim and complex international environment and greater shock of (the) Covid-19 pandemic at home obviously exceeded expectation, new downward pressure on the economy continued to grow.’

Nomura’s Ting Lu thinks ‘the unwinding of lockdowns has been extremely slow, due partly to the caution among local government officials…local lockdowns will still severely impact the production-end of the economy in May and (we) view a quick turnaround as all but impossible’

The impact of ‘zero-covid’ lockdowns, particularly in Shanghai, has been disastrous for the economy.


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