Alibaba Group Holding project 2022 revenue that beat estimates, indicating it’s moving past an antitrust investigation that dragged it into the red for the first time in nine years.
Jack Ma’s e-commerce company forecast revenue for the year ending March 2022 will rise at least 30 percent to more than $144 billion, beating the 923.5bn yuan average seen by analysts. That’s a deceleration from the previous year’s 41 percent.
Sales for the three months ended on March was a better-than-expected 187.4bn yuan, but it swung to a 5.5bn yuan net loss – its first since 2012 –after the company swallowed a $2.8bn fine for monopolistic behavior imposed by Beijing.
Executives have looked to put behind them a crackdown on Ma’s internet empire that’s shaved $260bn off the Chinese internet behemoth’s market value. The $2.8bn fine marked the conclusion of a four-month probe, but the threat of future action will likely cast a shadow over Alibaba’s business for some time.
Following the fine, Alibaba joined 33 other tech companies in pledging to abide by monopoly laws and eradicate abuses like forced exclusivity agreements. The government has also pushed for greater control over the invaluable online data amassed by its internet companies that have enabled their meteoric expansion over the past decade. Antitrust watchdogs are screening its previous investments and could force a divestment if deemed in violation of regulations.
Alibaba’s regulatory overhang may lift with China’s $2.8bn fine in April potentially marking an end to the worst of the scrutiny that began in late 2020, Bloomberg analysts Vey-Sern Ling and Tiffany Tam said.
Meanwhile it could continue to benefit from the accelerated user and merchant adoption of its online grocery shopping, cloud computing and remote-work applications in the aftermath of the pandemic. Longer-term sales and profit growth could be driven by global expansion and the monetization of newer business segments such as logistics, media and entertainment, they said
Alibaba is keen to convey the impression that it’s back to business as normal. Ma was spotted this week at an annual staff and family celebration at its sprawling Hangzhou campus, where kids played in ball pits while company mascots posed for photos with employees in cosplay.