Bond Market News

Alibaba slashed its 2022 forecast for fiscal revenue growth from the 27% projected by analysts to 20-23%, following sales that missed estimates for a second straight quarter. Alibaba reported a 29% rise in revenue for 3Q2021 to RMB 200.7bn ($31.4bn) lagging estimates of over $32bn. Net income plummeted 81% to RMB 5.4bn ($846mn). The weak results came after a markdown of its equity investments and underperformance at multiple divisions. Its EBITDA fell 27% with the company saying that it was due to more investments into new businesses. Primarily, Customer Management Revenue (CMR), considered to be the largest portion of its sales grew only 3% YoY, its slowest in five quarters. Alibaba said that the slow growth in CMR “resulted from slowing market conditions and more players in the China e-commerce market”. Its core commerce business saw revenue grow 31% YoY to RMB 171.17bn ($26.8bn), missing analysts’ expectations. “Looking ahead, we will continue to invest heavily into three growth engines of domestic consumption, globalization, cloud computing and data intelligence,” CEO Daniel Zhang said.

Alibaba’s dollar bonds were trading stable with its 3.25% 2061s at 93.15, yielding 3.58%.

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