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Alibaba Stocks Slumps on Downbeat Fiscal Q2 Earnings

On Friday, Hong Kong-listed shares of Alibaba Group Holdings tumbled after its fiscal second-quarter results missed market estimates. 

The e-commerce giant sank 10.32% or 2.07 points to $17.96 per share, trailing its plunge of 5.34% to $20.03 yesterday. 

Accordingly, its revenue climbed 29.00% year-over-year to $31.15 million. However, it came in lower than the expected figure of $32.09 million. 

Still, its core commerce segment contributed a 31.00% gain to $26.81 billion. 

Correspondingly, its adjusted earnings per share weakened 38.00% to $1.74. It also fell short of the analysts’ projection of $1.94. 

In line with this, Alibaba slashed its guidance for its current fiscal year. The company previously anticipated bringing in 29.50% year-on-year growth to $145.64 billion.

Subsequently, it lowered its forecast between 20.00% and 23.00% year-on-year, heavily weighed down by slowed economic recovery in China. 

In the third quarter, Chinese gross domestic product (GDP) and industrial production sharply declined from last year, hitting local consumption. 

Moreover, the firm explained that its earnings before interest, taxes, depreciation, and amortization (EBITDA), fell 27.00% year-over-year to $34.84 billion.

This figure measures profitability, whereas its downturn came from its extensive investments into new businesses. 

Additionally, the persisting Beijing’s crackdown on its technology industry pummeled Alibaba’s recent financial results.

In the past few years, highly-valued tech firms have mainly grown unencumbered. However, local regulators tightened specific rulings to clean up the misbehaviors of its corporations. 

Last April, Alibaba received a $2.78 billion fine as part of an anti-monopoly probe, which dragged the business to a huge loss. 

Meanwhile, it came off the back of Singles Day, a major Chinese shopping event, where it  posted a gross merchandise volume of $84.54 billion.

Hong Kong Shares Declines as Alibaba Stocks Dip

Moreover, shares in Hong Kong fell, which is mainly weighed by the disappointing earnings result of Alibaba. 

Consequently, the Hang Seng index plummeted 1.63% or 411.77 points to $24,907.95 per share. 

On the other hand, mainland Chinese stocks listed gains. The Shanghai Composite index advanced 0.56% or 19.58 points to $3,540.37 per share. 

Similarly, the benchmark Shenzhen Composite improved 0.63% or 91.33 points to $14,672.81 per share. 

Elsewhere, Japan’s Nikkei 225 index elevated 0.35% or 103.35 points to $29,704.83 per share. 

Then, the broader TOPIX index jumped 0.30% or 6.16 points to $2,041.68 per share. 

In Australia, the S&P/ASX 200 index increased 0.23% or 17.30 points to $7,396.50 per share. 

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