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The firm logged revenue of RMB208.20 billion ($1 = RMB7.04) for the three months to March 31, lower than analyst estimates of RMB210.3B. Its revenue for the year to March 31 also rose just 2% to RMB868.69B, its worst pace of growth since the company listed in 2014.
Alibaba’s Hong Kong shares sank more than 5%, tracking a similar overnight decline in the firm’s American Depository Receipts (NYSE:BABA). The stock took little support from Alibaba saying that it will spin off and list its cloud unit within the year.
While the stock had received some support in recent sessions, especially as the “Big Short’s” Michael Burry doubled his stake in the firm, Friday’s losses saw it unwind most recent gains, with the stock now trading just above a two-month low.
Alibaba’s Chinese direct sales, which make up the biggest portion of its revenue, fell 1% in the quarter, as consumer spending in China continued to struggle despite the lifting of anti-COVID measures.
Revenue from other China-focused businesses also declined, as the firm faces increased competition from other e-commerce entrants, including JD.com (HK:9618) (NASDAQ:JD) and PDD Holdings Inc (NASDAQ:PDD).
While Chinese consumer spending rose somewhat this year, it still remained well below pre-COVID levels. But it still helped Alibaba log a net profit of RMB23.52B for the year, compared to a loss of RMB16.24B last year.
The firm also faces a brewing price war in its cloud business with rival Tencent Holdings Ltd (HK:0700), amid weak corporate demand and excess capacity in the space.
Alibaba is also attempting to break into the generative artificial intelligence space with its Tongyi Qianwen model, which it had revealed last month. The firm has now opened up registration to test the technology for Alibaba Cloud’s enterprise customers.
The broader Hong Kong Hang Seng index fell 1.1% on Friday, as losses in Alibaba spilled over into other heavyweight technology stocks.
