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.
IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs (read about CFDs here), you can buy long or sell short on Alibaba and other Chinese tech stocks depending on whether you think prices will rise or fall. Start today by opening an IG account.
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
How to trade Chinese tech stocks with IG
Are you bullish or bearish on Alibaba, Tencent, Baidu, JD.com and other Chinese tech titans' shares? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.