Alibaba is likely to post Moderate Sales Growth

Key Street Shops

  • Chinese e-commerce giant Alibaba is expected to post flat quarterly profit and moderate sales growth when it reports results for its September quarter on November 17.
  • Analysts expect adjusted earnings of 11.23 yuan per US-traded share compared with 11.20 in the year-ago quarter.
  • Option traders have recently turned heavily on Alibaba amid signs that China’s regulatory crackdown on the company is easing.
  • Slowing economic growth in China remains a major risk after relentless Singles Day promotion.

Chinese e-commerce and cloud computing giant Alibaba Group Holdings Ltd. (BABA) led its quarterly earnings report, leading to investor anticipation of the sharp slowdown in China’s economic growth this year.

Alibaba is expected to post adjusted earnings of 11.23 yuan ($1.58) per U.S.-traded share for the quarter through September, up two-tenths of a percent year over year after four straight quarters of profit declines , based on the mean estimate. of the analysts tracked by Visible Alpha. Revenue is expected to rise 4% after a marginal drop in the June period, the first quarterly decline in sales as a public company, after increases of less than 10% in each of the previous two periods. In the previous 14 quarters, revenue growth ranged from a low of 29% to a high of 64%.

Options traders who have driven the stock’s call-to-call ratio to near record lows may be counting on an upbeat market response if Alibaba confirms recent reports of progress with Chinese regulators as well as regulators USA. China’s tough regulatory crackdown on the company and other big tech firms appears to be easing, with one investment analyst noting that Alibaba recently received a positive progress report from Chinese regulators for improvements in areas with includes protections for merchants and users.

Meanwhile, US inspectors from the Public Company Accounting Oversight Board reported that they found cooperation from Hong Kong and Chinese auditors of Chinese companies in reviews of US listings, raising hopes of a resolution to a conflict that has put Alibaba’s listing on hold. New York stock at risk. Exchange.

Interest in Chinese stocks has recently revived after the Chinese government took initial steps to ease quarantine measures under its “Zero-Covid” policy, and offered a package of relief provisions that address a real estate slump that has hurt consumer spending and provincial tax revenue. That helped increase Alibaba’s value by 20% over the past five trading days.

Meanwhile, there are few signs of a quick recovery for China’s economy and Alibaba’s sales. Alibaba and rival Inc. broke up. (JD) has set a precedent this year by choosing not to disclose online revenue from Singles Day, China’s big online shopping promotion, amid forecasts of disappointing sales.

Source: TradingView.

Source: TradingView

Alibaba Earnings History

Alibaba’s June quarter revenue and earnings met market expectations on August 4, and its US-traded shares rose nearly 2% that day. ​​​​​​Alibaba gained nearly 15% in New York trading on May 26 after March quarter earnings and revenue beat analyst estimates.

Alibaba key studies

Estimate for Q2 FY 2023 Q2 FY 2022 Q2 FY 2021
Adjusted Earnings

Against TSB (Yuan)
11.23 11.20 17.97
Revenue (Billion Yuan) 209.2 200.7 155.1

Source: Visible Alpha

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