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  •  Alibaba's (BABA) U.S.-listed shares jumped by 6% after the tech giant reported earnings for its fiscal third quarter that exceeded expectations. Despite the positive earnings report, the e-commerce giant's value has suffered a significant decline of around $600 billion since its peak in October 2020. The Chinese ecommerce giant reported adjusted net income rose 12% from a year earlier to 50B yuan ($7.2B) on the back of 248B yuan of revenue, above analysts’ estimates.
  • Revenue from Alibaba's biggest business, the China commerce division, including its popular marketplace Taobao, declined by 1% year on year to 169.99 billion yuan. This drop was driven by a 9% year-on-year decline in customer management revenue, obtained from services such as marketing that Alibaba sells to merchants on its Taobao and Tmall e-commerce platforms. 

Why it matters

Investors in Hong Kong, however, are optimistic that China's economic reopening will boost consumer sentiment and spending, ultimately benefiting Alibaba. During the December quarter, China relaxed its strict Covid-19 control policies, which could help to boost the economy. Analysts are expecting Alibaba to see faster revenue growth over the coming quarters as the full effect of the Chinese economic reopening is felt. Morgan Stanley named Alibaba its “top pick” in the Chinese tech sector for the first time in three years, in a recent note.


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