Alibaba Delays Primary Hong Kong Listing as Revenue Growth Slows

Hangzhou-based internet giant Alibaba stated on November 17 that it will not complete a primary listing in Hong Kong before the end of the year as initially planned. This delay comes as the firm struggles with slowing growth at home.

“Before our conversion to a primary listing in Hong Kong, we also need to formulate and submit a new employee stock ownership program to our shareholders for approval in order to comply with the newly amended rules in Hong Kong,” Alibaba said in a statement. The company, which already has a secondary listing in Hong Kong, said in July it expected the primary listing to be completed by the end of this year.

Alibaba also reported that its total revenue stood at 207.18 billion yuan ($29 million) during the July-September period, only up 3% year-on-year. Its net loss was 22,467 million yuan, compared to net income of 3,377 million yuan in the same quarter of 2021, primarily attributable to an increase in net losses arising from the decrease in market prices of its equity investments in publicly-traded companies and a decrease in share of results of equity method investees, partly offset by the increase in adjusted EBITA.

Revenue from its China commerce retail business in the quarter ended September 30, 2022 was 131,222 million yuan, a decrease of 1% compared to 131,946 million yuan in the same quarter of 2021. Taobao and Tmall’s customer management fees continued to shrink in the September quarter with a 7% year-over-year decline to 66.5 billion yuan.

“In the uncertain environment of operation, all merchants are very cautious in their marketing budget expenditure,” Chief Executive Officer Daniel Zhang told analysts in a post-earnings conference call. “The biggest change before and after the epidemic lies in that they pay more attention to the transformation of marketing effect, namely return on investment, and pursue more effective advertising and brand exposure.”

For the first time, both Alibaba and rival did not reveal gross merchandise volume (GMV) data from China’s Double 11 Shopping Festival. Alibaba said its total GMV was in line with its performance last year during the same period.

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Alibaba‘s international commerce retail businesses include Lazada, AliExpress, Trendyol and Daraz. During the September quarter, the combined number of orders of Lazada, AliExpress, Trendyol and Daraz declined by 3% year-over-year, primarily driven by declining orders of Lazada and AliExpress, partly offset by strong order growth of Trendyol.

Cloud computing, Alibaba‘s second-largest revenue source, was 20.76 billion yuan, an increase of 4% year-over-year. As of November 16, 2022, Alibaba had repurchased approximately $18 billion of its shares under the existing $25 billion share repurchase program. In addition, the board has approved a move to upsize the share repurchase program by another $15 billion and extend the program to the end of fiscal year 2025.