Alibaba shares tumble in pre-market trading as Q4 earnings fall 89%
Share price of the Chinese e-commerce giant slid over 2.0% in early trading after the group reported lower profits and earnings in its final fiscal quarter.
US shares of Chinese e-commerce and technology group Alibaba Group Holding fell over 2.0% in pre-market trading shortly after Q4 and full-year financial results were announced on Friday 22 May 2020.
As at 08:45 ET on Friday 22 May 2020, Alibaba’s American depository shares (ADS) are trading at US$208.33 per share, based on live IG estimates.
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Highlights from Alibaba’s Q4 financial results
Here are the figures that stood out most in the conglomerate's fourth quarter earnings for the three months ended 31 March 2020:
- Revenue was RMB114.31 billion (US$16.14 billion), an increase of 22% year-over-year
- Annual active consumers on China retail marketplaces reached 726 million, an increase of 15 million from the 12-month period ended December 31, 2019
- Mobile monthly active users on China retail marketplaces reached 846 million in March 2020, an increase of 22 million over December 2019
- On a company-adjusted non-GAAP basis, earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 1% year-over-year to RMB25.44 billion (US$3.6 billion)
- On a company-adjusted non-GAAP basis, diluted earnings per ADS was RMB9.20 (US$1.30), an increase of 7% year-over-year, while non-GAAP diluted earnings per share was RMB1.15 (US$0.16 or HK$1.26), an increase of 7% year-over-year
- Income from operations was RMB7,131 million (US$1.01 billion), a decrease of 19% year-on-year, which the group said was ‘primarily due to the impact of the COVID-19 pandemic’
- Net income (or profit) attributable to ordinary shareholders was RMB3,162 million (US$447 million), a decrease of 88% year-over-year
- Net income (or profit) was RMB348 million (US$49 million), a decrease of 99% year-over year. The company attributed the year-over-year decrease to a net loss in investment income, mainly reflecting decreases in the market prices of our equity investments in publicly-traded companies, compared to a net gain recorded in the same quarter of 2019
- On an accounting-standard unadjusted GAAP basis, diluted earnings per ADS was RMB1.16 (US$0.16), a decline of 88% year-on-year
- On an accounting-standard unadjusted GAAP basis, diluted earnings per share was RMB0.14 (US$0.02 or HK$0.15) a share, an 89% year-on-year decline
Alibaba share price forecast: technical view
IG Asia market analyst Pan Jingyi noted that Alibaba shares 'have staged a strong rebound after plunging into March alongside the broader market'.
Although prices retraced significantly in April (over 6%), and continue to remain lifted going into late May, she cautioned that attempts at further upsides in the last two months had been stalled by a resistance zone at around US$223 to US$235.
'A continuation of the long-term uptrend would require a convincing break above the resistance zone, one to watch for further triggers while momentum picks up,' Pan concluded.
Alibaba's US shares face resistance at around US$223 to US$253
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