Alibaba said the fine of more than 18.2 billion yuan will be reflected in its quarterly results for the period ending in March. (Radio Television Hong Kong)
The Communist Party of China’s State Administration of Market Supervision issued an administrative penalty to Alibaba under the anti-monopoly law, fining it a record high of more than 18.2 billion yuan ($2.787.82 million). Cai Chongxin, the group’s vice chairman of operations, reiterated during the analysts’ conference call that he sincerely accepts and firmly obeys the penalty and has no plans to appeal against it. He also pointed out that the penalty amount is equivalent to 4% of the group’s sales in mainland China in 2019, in addition to no more than 20% of free cash flow for the last 12 months.
According to Radio Television Hong Kong, Tsai said the group and its peers are still under scrutiny by regulatory authorities on M&A and strategic investment transactions, other than that, the group is not aware of any other anti-monopoly-related investigations.
The fine will be reflected in the quarterly results for the end of March and will affect GAAP earnings performance, but not non-GAAP earnings, noted Wu Wei, the group’s chief financial officer.
Cai Chongxin said Alibaba understands that regulatory authorities focus on how companies collect and protect information privacy, is a global trend. He also said that the platform economy helps economic growth and innovation, and there is nothing wrong with the group’s platform economy as a business model.
Zhang Yong, Chairman of the Group, said that in the past few months, Alibaba gradually exempted technology-related service fees, and in the future, the Group will continue to improve and update the relevant technology, mature services will be exempted from fees, and launch new fee-based services, hoping to reduce operating costs and barriers to entry for merchants.
Wu Wei pointed out that the relevant investment will involve about RMB 1 billion (about US$153.17 million) in the next few years.
However, the 9% surge in Alibaba’s Hong Kong shares after the heavy fine has raised concerns about whether the shortfall is over.
According to Radio Television Hong Kong, the Hong Kong stock technology index lost its 8300-point level today to a low of 8230, down 75 points, or 0.9%. Alibaba shares rose sharply by up to 9% to a high of $237.6, now narrowed to less than 8%, is the best performance of blue-chip stocks.
Other technology stocks were under pressure, with Tencent, Jingdong, Xiaomi and Baidu down nearly 2% to nearly 3%. American Group and Geely fell nearly 6% or more, is the worst performance of the two blue-chip stocks.
Heavyweight stocks HSBC and AIA fell more than 1%, both dragging down the market. Pharmaceutical stocks under pressure, oil stocks to the good.
Recent Comments