Alibaba posts its annual revenue increase despite spending slump
BEIJING: Internet giant Alibaba posted on Thursday a six percent increase in annual revenue, the latest positive sign for China's tech sector despite persisting economic uncertainties that include sluggish spending and threatened trade. The Hangzhou-based company is one of the biggest players in China's tech industry, with operations spanning retail, digital payment, artificial intelligence and entertainment.
This year has seen its share price rollercoaster on a wave of investor enthusiasm about Chinese AI capabilities that began in January, followed by a steep drop last month triggered by US President Donald Trump's global tariff blitz. The firm's revenue during the fiscal year ended March 31 totaled 996.3 billion yuan ($138.2 billion), according to results posted to the Hong Kong Stock Exchange, up six percent from the previous 12-month period.
Net income attributable to ordinary shareholders rose to 129.5 billion yuan, the statement showed, a jump of 62 percent year-on-year according to AFP calculations. In the final quarter alone, Alibaba saw revenue of 236.5 billion yuan, narrowly coming up short of a Bloomberg forecast. Net income attributable to ordinary shareholders during the quarter reached 12.4 billion yuan, surging 279 percent from the low base of 3.3 billion yuan recorded during the same period last year.
'Our results this quarter and for the full fiscal year demonstrate the ongoing effectiveness of our 'user first, AI-driven' strategy, with core business growth continuing to accelerate,' CEO Eddie Wu said in a statement. The growth is another positive sign for China's tech sector, which has garnered revamped interest from investors since the shock release in January of advanced AI chatbot DeepSeek - apparently developed at a fraction of the cost thought necessary. Alibaba and fellow tech giants Tencent and Baidu are now funneling large sums into a new race to develop and integrate the most cutting-edge AI applications.
Spending slump
As the Chinese economy strains under sluggish spending and a tumultuous trade relationship with the United States, Beijing is increasingly looking to platforms operated by domestic internet giants as a cushion for employment and consumption. Prospects improved Monday when Beijing and Washington announced plans to significantly scale back sky-high tariffs that had severely threatened trade between the two nations. However, economists say that the Chinese economy may still struggle to achieve the official growth target set by leaders of around five percent this year.
Alibaba's announcement on Thursday came after Tencent and e-commerce giant JD.com posted moderate increases in first-quarter revenue earlier this week, indicating a possible rebound in spending. But official figures released on Saturday showed that consumer prices remained mired in a slump last month, reflecting continued deflationary pressure. Alibaba was once a key subject of the aggressive regulatory crackdown launched in late 2020 on the domestic tech sector, attributed to worries in Beijing that top firms had become too powerful.
Jack Ma, the firm's charismatic co-founder who had spoken boldly about the shortcomings of China's financial and regulatory system, kept a low profile during the lengthy campaign. He reappeared in February during a meeting with President Xi Jinping and other business luminaries - a shock development that suggested a warmer stance from Beijing and sent Alibaba stocks soaring. Ma is no longer an executive at Alibaba but is believed to retain a significant shareholding in the company. - AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kuwait Times
15 hours ago
- Kuwait Times
Airline chiefs meet in India amid turbulence of Trump
NEW DELHI: Airline bosses meet from Sunday in New Delhi at their annual industry conference, battling to mitigate the impact of Donald Trump's policies that have hit travel to the United States and potentially raised costs for aviation. Trump's bid to impose tariffs on the United States' trading partners have upended commercial flows, with legal challenges against his plan adding to uncertainties. The tense atmosphere in the United States, from Trump's plans to revoke foreign students' visas to reports of travelers detained at US borders, has also put a dampener on tourism. 'The airline sector is always sensitive to the economic and political climate,' Paul Chiambaretto, professor of strategy and marketing at France's Montpellier Business School, told AFP. 'Any form of uncertainty will reduce traffic,' he added, noting it 'especially' impacted business travelers, the most profitable segment. The influential International Air Transport Association (IATA) is due to update its traffic and profitability projections as the delegates from the group gathering 350 airlines hold their talks. In December it forecast a record 5.2 billion air journeys in 2025 - up 6.7 percent from an already unprecedented 2024. It predicted carriers would generate $36.6 billion in cumulative net profit, on revenue exceeding $1 trillion. However, the US president's 'Liberation Day' tariff blitz and his administration's stance on issues from immigration to education could throw a spanner in the works. Putting up the 'closed' sign As early as March, the North American air transport market, which represents 23 percent of global traffic, began to decline and several US-based airlines warned they would not meet their financial targets. A study released this month by the World Travel and Tourism Council and Oxford Economics found that the United States was on track to lose some $12.5 billion in revenue from foreign tourists this year owing to worries about travelling to the country. The group, made up of leading travel firms, said this 'represents a direct blow to the US economy overall, impacting communities, jobs, and businesses from coast to coast'. 'While other nations are rolling out the welcome mat, the US government is putting up the 'closed' sign,' WTTC president Julia Simpson said. Didier Brechemier, an airline industry expert at Roland Berger, said: 'Today, bookings for the North Atlantic are lower than they were at the same time last year.' IATA Director General Willie Walsh noted on Thursday 'some signs of fragility of consumer and business confidence with continued weakness in the US domestic market and a sharp fall in North American premium class travel'. Air transport has for decades benefited from the removal of import taxes, rising living standards — particularly in Asia — and open borders, with the number of air trips tripling since 2000. But the return of protectionism is endangering the industrial model of aircraft manufacturers, whose assembly lines mobilize suppliers worldwide, with costs likely to increase, putting more of a burden on carriers. — AFP Lower energy costs There's good news for carriers, though, with oil prices falling owing to an anticipated slowdown in economic growth. That could help firms reduce their fuel bills—representing between a quarter and a third of their operational costs—by hundreds of millions of dollars. Washington's new Republican administration is also fully supporting the development of fossil fuels, in contrast to that of Democratic former president Joe Biden, who subsidized Sustainable Aviation Fuel (SAF). Sustainable development 'has largely disappeared from the airline industry's immediate priorities', says Jerome Bouchard, a partner at consultants Oliver Wyman. Also likely on the agenda for IATA will be the impact of geopolitical tensions on the industry. India is experiencing explosive growth, with the number of airports and passengers in the world's most populous nation doubling over the past decade, while major airlines IndiGo and Air India have hundreds of aircraft on order. Prime Minister Narendra Modi is expected to address delegates on Monday, organizers said. The country's recent deadly spat with neighbor Pakistan, which saw the two sides impose airspace bans on each other, highlighted the fragility of civil aviation in the face of such upheavals. The row poses an additional complication for connections to Asia, as Russia has banned US and EU aircraft overflights in retaliation for sanctions linked to its invasion of Ukraine.- AFP
Kuwait Times
15 hours ago
- Kuwait Times
Trump to double steel, aluminum tariffs to 50%
WEST MIFFLIN: US President Donald Trump said that he would double steel and aluminum import tariffs to 50 percent from next week, the latest salvo in his trade wars aimed at protecting domestic industries. 'We're going to bring it from 25 percent to 50 percent, the tariffs on steel into the United States of America,' he said while addressing workers at a US Steel plant in Pennsylvania. 'Nobody's going to get around that,' he added in the speech before blue-collar workers in the battleground state that helped deliver his election victory last year. Shortly after, Trump wrote in a Truth Social post that the elevated rate would also apply to aluminum, with the new tariffs 'effective Wednesday, June 4th.' Since returning to the presidency in January, Trump has imposed sweeping tariffs on allies and adversaries alike in moves that have rocked the world trade order and roiled financial markets. The tariffs had seen a brief legal setback earlier this week when a court ruled Trump had overstepped his authority, but an appellate court on Thursday said the tariffs could continue while the litigation moves forward. Trump has also issued sector-specific levies that affect goods such as automobiles. On Friday, he defended his trade policies, arguing that tariffs helped protect US industry. He added that the steel facility he was speaking in would not exist if he had not also imposed duties on metals imports during his first administration. 'Devil in the details' On Friday, Trump touted a planned partnership between US Steel and Japan's Nippon Steel, but offered few new details on a deal that earlier faced bipartisan opposition. He stressed that despite a recently announced planned partnership between the American steelmaker and Nippon Steel, 'US Steel will continue to be controlled by the USA.' He added that there would be no layoffs or outsourcing of jobs by the company. Upon returning to Washington late Friday, Trump told reporters he had yet to approve the deal. 'I have to approve the final deal with Nippon, and we haven't seen that final deal yet, but they've made a very big commitment,' Trump said. Last week, Trump said that US Steel would remain in America with its headquarters to stay in Pittsburgh, adding that the arrangement with Nippon would create at least 70,000 jobs and add $14 billion to the US economy. Trump in Pennsylvania said that as part of its commitment, Nippon would invest $2.2 billion to boost steel production in the Mon Valley Works-Irvin plant where he was speaking. Another $7 billion would go towards modernizing steel mills, expanding ore mining and building facilities in places including Indiana and Minnesota. A proposed $14.9 billion sale of US Steel to Nippon Steel had previously drawn political opposition from both sides of the aisle. Former president Joe Biden blocked the deal on national security grounds shortly before leaving office. There remain lingering concerns over the new partnership. The United Steelworkers union (USW) which represents thousands of hourly workers at US Steel facilities said after Trump's speech that it had not participated in discussions involving Nippon Steel and the Trump administration, 'nor were we consulted.' 'We cannot speculate about the meaning of the 'planned partnership,'' said USW International President David McCall in a statement. 'Whatever the deal structure, our primary concern remains with the impact that this merger of US Steel into a foreign competitor will have on national security, our members and the communities where we live and work,' McCall said. 'The devil is always in the details,' he added. Trump had opposed Nippon Steel's takeover plan while on the election campaign trail. But since returning to the presidency, he signaled that he would be open to some form of investment after all. — AFP
Kuwait Times
a day ago
- Kuwait Times
Car makers warn ‘rare-earth curbs could halt production'
China's export restrictions impact global auto production WASHINGTON: Global auto executives are sounding the alarm on an impending shortage of rare-earth magnets from China – used in everything from windshield-wiper motors to anti-lock braking sensors – that could force the closure of car factories within weeks. In a previously unreported May 9 letter to Trump administration officials, the head of the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major automakers raised urgent concerns. 'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,' the Alliance for Automotive Innovation wrote the Trump administration. The letter, which also was signed by MEMA, The Vehicle Suppliers Association, added that, without those essential automotive components, it would only be a matter of time before US vehicle factories are disrupted. 'In severe cases, this could include the need for reduced production volumes or even a shutdown of vehicle assembly lines,' the groups said. Both Alliance CEO John Bozzella and MEMA CEO Bill Long told Reuters on Friday the situation was not resolved and remained a concern. They expressed gratitude for the Trump administration's high-level engagement to prevent disruption to US auto production and the supply chain. Bozzella noted that the automotive issue was on the agenda during Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer's talks with their Chinese counterparts in Geneva earlier this month. Greer told CNBC on Friday that China had agreed to lift restrictions on the exports of rare-earth magnets to US companies and was not moving fast enough to grant access for key US industries. 'We haven't seen the flow of some of those critical minerals as they were supposed to be doing.' China - which controls over 90 percent of global processing capacity for the magnets used in everything from automobiles and fighter jets to home appliances - imposed restrictions in early April requiring exporters to obtain licenses from Beijing. Rare-earth magnet exports from China halved in April as companies grappled with an opaque application process for permits that sometimes require hundreds of pages of documents. In a social-media post Friday, President Donald Trump accused China of violating terms of a deal reached this month to temporarily dial back tariffs and other trade restrictions. 'China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,' Trump said in a post on his Truth Social platform. China's embassy in Washington responded by saying it was the US that was abusing export controls in the semiconductor sector. A US official with knowledge of the talks told Reuters that only tariffs and Chinese non-tariff countermeasures were covered in Geneva talks, and that US export controls were not part of the deal. The official also expressed frustration that Beijing appeared to be moving slowly on promises to issue rare-earth export licenses, which could kick start export control retaliation by Washington if automakers vulnerable to shortages of the minerals are forced to halt production. While a handful of licenses have been granted, including to some Volkswagen suppliers, Indian automakers say they still have received none and will have to stop production in early June. German auto parts maker Bosch said this week that its suppliers have been bogged down by China's more-rigorous procedures to receive export licenses. A Bosch spokesperson described the process as 'complex and time-consuming, partly due to the need to collect and provide a lot of information.' — Reuters
