Home Business Alibaba’s second-quarter net profit drops 39% under CCP’s purge | Tmall | Ant Group | Jack Ma

Alibaba’s second-quarter net profit drops 39% under CCP’s purge | Tmall | Ant Group | Jack Ma

by admin

[EpochTimesNovember192021](Epoch Times reporter Li Jing comprehensive report) Following Tencent’s financial report showing that the company’s net profit fell for the first time in ten years, another Chinese Internet business giant Alibaba released a performance report showing that as of this year Net profit for the second quarter of fiscal year 2022 on September 30 fell 39% year-on-year.

On the evening of November 18th, China’s largest e-commerce company Alibaba Group released its second quarter financial report for the 2022 fiscal year. The financial report shows that Alibaba’s revenue for the quarter was 200.69 billion yuan (RMB, the same below), which was lower than market estimates.

In addition, the adjusted net profit was 28.52 billion yuan, a year-on-year decrease of 39%. Adjusted EBITDA (earnings before tax, interest, depreciation and amortization) was 34.84 billion yuan, a year-on-year decrease of 27%.

Regarding the year-on-year decrease in net profit, Alibaba said it was mainly due to increased investment in key strategic areas and measures to support merchants.

Prior to the release of the performance report, Alibaba Hong Kong stocks plunged more than 5%; Affected by the performance, Alibaba’s US stocks fell more than 3% before the market.

In addition, according to data from Tmall and JD.com, as of midnight on November 12, the total transaction volume of Tmall Double Eleven was 540.3 billion yuan. Compared with the same period last year, the growth rate of Alibaba’s Double Eleven transaction volume has declined. Compared with previous years, this year, under the strict supervision of the Chinese Communist Party on business giants, China’s largest online shopping day “Double Eleven” has been much lower-key.

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Just before Alibaba’s performance report, China’s largest Internet company Tencent Holdings released its 2021 third-quarter performance report on November 10. The report shows that non-IFRS net profit for Tencent’s core business performance in the third quarter fell year-on-year and month-on-month.

It is worth mentioning that since last year, the CCP authorities have purged Chinese Internet companies on the grounds of “national security” and “anti-monopoly.” Internet companies such as Tencent and Alibaba have been interviewed or fined by the authorities.

The China Securities Regulatory Commission and other departments conducted supervision interviews with Alibaba founder Jack Ma and others in November last year.

At the beginning of this year, the Chinese Communist Party’s antitrust agency imposed a sky-high fine of 18.228 billion yuan (approximately US$2.8 billion) on Alibaba, the largest fine in the organization’s history. Financial regulators have ordered Alibaba’s Internet finance sister company Ant Group to reorganize its business and accept stricter supervision.

Last month, the government required non-public capital not to invest in the establishment and operation of news organizations. Subsequently, a number of Lu Media reported that Ant Group had sold all of its shares in Caixin Media.

Since the beginning of this year, the Chinese Communist Party has publicly mentioned “common prosperity” more than 60 times. Internet companies such as Alibaba, Tencent, Meituan, ByteDance, and company founders have “actively” made huge donations.

The authorities continue to purge Internet companies, causing panic in the business community. Recently, the founders of well-known Internet companies including Liu Qiangdong, Zhang Yiming, and Huang Zheng have left the company’s executive positions. Jack Ma has stepped down as chairman of Alibaba’s board of directors in 2019 and will step down as a director of Alibaba in 2020.

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Editor in charge: Sun Yun#

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