Alibaba Group Holding Ltd. forecast better-than-expected revenue and pledged to invest in new growth arenas, signaling its intention to move past a Chinese antitrust probe that triggered its first loss in nine years.
Jack Ma¡¯s flagship e-commerce firm swung to a 5.5 billion yuan ($852 million) net loss ¡ª its first since 2012 ¡ª after the company swallowed a $2.8 billion fine for monopolistic behavior imposed by Beijing. It now intends to refocus on its business, plowing ¡°all incremental profit¡± back into technology and hotly contested areas like community commerce, Chief Executive Officer Daniel Zhang pledged on Thursday. Its shares fell more than 6% in Hong Kong after Citigroup and CICC slashed their price targets on fears that prioritizing growth will hammer profits.
Alibaba executives have sought to put behind them a crackdown on Ma¡¯s internet empire that¡¯s shaved $260 billion off the Chinese internet behemoth¡¯s market value. The penalty imposed in April marked the conclusion of a four-month probe, but uncertainty persists as Beijing continues to rein in Alibaba and increasingly powerful rivals from Tencent Holdings Ltd. to Meituan. No analyst asked directly about what¡¯s to come in the broader clampdown Thursday, though Zhang stressed the company accepted the fine and will move forward.
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