Alibaba Group Holding is set to announce its financial results for the third quarter of its fiscal year. Here are the key details you need to know:
Net Profit Forecast
According to a FactSet poll of analysts, the net profit for the quarter that ended on December 31 is expected to be 36.99 billion yuan (US$5.15 billion). This is a decrease from the net profit of CNY 46.81 billion in the same quarter last year, but an increase from CNY 27.71 billion in the previous quarter.
The expected revenue for the third quarter is CNY 261.34 billion, based on the FactSet poll. This is a growth from CNY 247.76 billion in the same period last year and CNY 224.79 billion in the second fiscal quarter.
The company's stock on the Hong Kong market experienced a decline of nearly 12% during the December quarter and is currently trading at around 76.00 Hong Kong dollars (US$9.72).
What to Watch For
Alibaba's revenue growth has been slowing down in recent quarters, once exceeding 30%. Investors will be closely observing the company's revenue numbers as an indicator of how well it is navigating through a slowing economy and intense competition. Analysts from Citi expect a 6.3% rise in third-quarter revenue, attributing softer direct sales and cloud revenue growth to the continued "upbeat momentum" of Alibaba's international e-commerce business.
In December, Alibaba's Taobao and Tmall Group announced a significant restructuring with the appointment of six executives to key positions. Investors will be interested in seeing how these personnel and structural changes, aimed at boosting revenue, impact the overall business.
Alibaba's international commerce business has seen strong growth in recent quarters. In the previous quarter, it reported a 53% increase in revenue compared to the company's overall growth of 9%. HSBC analysts noted that while international growth momentum is expected to remain robust, losses could potentially expand due to increased sales and marketing efforts in the latest quarter and the growing contribution from the consignment model.
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