Alibaba Group steps up stock buy-back in Hong Kong, New York as e-commerce rivalry, earnings outlook worry investors

E-commerce group spent US$4.8 billion in the quarter to March 31, the most since late 2021 to support the stock in Hong Kong and New York

Analysts have trimmed their 12-month price targets by 14 to 15 per cent this year amid concerns about its earnings outlook

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Published: 10:54am, 3 Apr 2024Updated: 4:33pm, 3 Apr 2024

Alibaba Group Holding, China’s biggest e-commerce platform operator, said it bought back US$4.8 billion worth of its own shares in Hong Kong and New York last quarter, marking the most aggressive buy-back since 2021 as the stock slipped amid concerns about competition and earnings outlook.

The company repurchased 524 million ordinary shares, or the equivalent of 65 million American depositary shares (ADS), during the first three months this year, according to a stock exchange filing on late Tuesday, versus US$1.9 billion in the same quarter last year. It spent US$2.9 billion in the final three months of 2023.

The March quarter buy-back reduced Alibaba’s share capital base by 5.1 per cent, or 1.057 billion shares, well ahead of its 3 per cent minimum annual commitment. It was also highest outlay since it spent more than US$5.1 billion on stock buy-back in the September 2021 quarter.

In all, Alibaba Group used up US$12.5 billion from its cash hoard on buy-back in the fiscal year to March 31, versus US$10.8 billion in the preceding 12 months, the filing showed. It had just under US$92 billion of cash and cash equivalent on December 31 last year.

Joe Tsai, co-founder and chairman of Alibaba Group. Photo: AFP

Alibaba Group, based in Hangzhou in eastern Zhejiang province, owns of the South China Morning Post.

The e-commerce group had earlier upsized its programme by US$25 billion, expanding its dry powder to US$31.9 billion through March 2027 after the latest spending. The decision, it said, underlined the board’s confidence in the business outlook, while boosting per-share earnings and cash flow for shareholders.