Alibaba shares fall as China economy weakens as quarterly earnings loom – Hong Kong-listed shares of Alibaba Group (HK:9988) (NYSE: BABA ) fell on Thursday on expectations that a quarterly earnings report will show whether the e-commerce giant has weathered China’s economic downturn.

Alibaba’s share price fell 1.7% to HK$81.80, following the overall decline of the Hang Seng Index. Alibaba shares have fallen about 7% so far in 2023, while the Hang Seng Index has fallen 11%.

The company expects to release Earnings per share are approximately 15.39 yuanRevenue for the three months ended September 30 was 224.95 billion yuan ($31 billion), according to estimates.

Any results in line with expectations would represent profit and revenue growth for the company, which has been grappling with continued decline in China, its biggest market.

The e-commerce giant’s profits have grown steadily this year as its domestic unit targets low-cost products to attract more customers. Revenue also benefited from easing supply chain issues after China lifted most restrictions to combat the coronavirus earlier this year.

But China’s recent economic indicators have raised concerns about the resilience of the country’s consumer spending. deflation in October, and briefly entered deflation in the September quarter.

Economic activity in the country has struggled to pick up this year, which in turn has made consumers wary of large purchases. However, discount and low-cost retailers are benefiting from this trend.

Alibaba rival (HK:9618) (NASDAQ: JD) reported better-than-expected quarterly results on Wednesday, sparking optimism about similar results for Alibaba. shares rose nearly 3% in Hong Kong trading.

But beyond consumer spending, the focus will also be on Alibaba’s cloud unit, which has been grappling with a severe slump in technology spending over the past year and triggered a crisis after slashing prices to attract customers. price war.

The cloud unit is also at the heart of Alibaba’s attempts to develop generative artificial intelligence, following a boom in the field this year. The company launched a major update to its Unified Qianwen artificial intelligence model earlier this month.

Alibaba is also expected to provide an update on its plans to split into six independent companies in an effort to appease Chinese regulators. The company is due to release quarterly earnings before U.S. stocks open on Thursday.

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