By Ambar Warrick
Investing.com– Hong Kong-listed shares of e-commerce giant Alibaba Group rallied on Thursday ahead of its quarterly results due later in the day.
Alibaba’s stock (HK:9988) opened 13% higher at 103.90 Hong Kong dollars (HK$), before consolidating some gains. As of 0137 AM ET (0537 GMT), they were trading about 4.5% higher at HK$94.50.
Gains in Alibaba were likely driven by broader optimism over technology stocks, following positive tech earnings on Wall Street in the prior session.
Alibaba is widely expected to report its first-ever decline in revenue, as a series of COVID-related lockdowns severely dented its Chinese operations.
Revenue is expected to fall to 203.8 billion yuan, down 1% from last year. Earnings per share are expected to tumble by over a third to 1.18 yuan.
But analysts expect the e-commerce giant to see improving prospects through the rest of the year. Consensus is for Alibaba’s revenue to increase steadily through the remainder of the year, mirroring a recovery in the Chinese economy.
Beijing is now lifting COVID lockdowns across most major industrial hubs- a sign that the world’s second-largest economy may be on a path to recovery by the end of 2022.
Alibaba’s stock performance this year suggests that a downturn in its biggest market largely priced in. The stock slumped to a record low in March, just as China imposed new COVID lockdowns in its major cities.
Alibaba is trading down over 50% in the past 12 months. Its New York-listed shares (NYSE:BABA) are also down in a similar range.
But the Chinese tech giant hasn’t been alone in its losses. Increased regulatory scrutiny towards major tech firms in the mainland has also dented peers such as Tencent (HK:0700) and Baidu (HK:9888)- the other two components of China’s BAT trio.
Tencent, which is trading down 30% over the past year, is set to report its earnings later in the month.
Source:investing.com