Alibaba Group Holding Ltd reported its quarterly earnings on Thursday, narrowly missing its revenue estimates. This comes after the company announced that its board approved a spinoff of its cloud computing business.
The Chinese eCommerce giant reported revenue of 208.20 billion yuan ($30.12 billion) for the first three months of 2023, narrowly falling short of a Refinitiv consensus estimate of 210.3 billion yuan drawn from 26 analysts. Still, the company’s first-quarter revenue is a 2% rise from the previous quarter.
Net income from the period that was attributable to ordinary shareholders was 23.52 billion yuan; compared with a loss of 16.24 billion yuan.
China’s consumer spending continues to remain low following the abolishment of the country’s zero-COVID policies late last year, with the country exhibiting a slower economic recovery than was initially expected.
In an effort to capture new market share, Alibaba approved a full spinoff of the Cloud Intelligence Group, which is expected to be completed within the next 12 months. It is set to take the form of a stock dividend distribution to shareholders.
In addition, Finance Chief Toby Xu announced that the company’s board has approved the process for external financing for Alibaba International Digital Commerce Business Group as well as the launch of an IPO for Freshippo and the exploration of an IPO for Cainiao Smart Logistics Group.