Alibaba Group, the country’s leading ecommerce company, has shocked investors with an unexpected 81 per cent fall in profits in the September quarter due to tough action by the Chinese government against tech companies and digital service providers.
Suffice it to say that the current quarterly results have come as a huge shock to Alibaba investors as the Chinese government is slowly recovering from fines and damage to the stock market.
Alibaba company
Alibaba posted a profit of about 28.77 billion yuan in the July-September quarter last year, down 81 percent this year to just 5.37 billion yuan. The biggest impact is a 81 percent decline in one year.
Action by the Chinese government
Similarly, Alibaba did not attribute the decline to the actions of the Chinese government, but explained that the decline in profit margins was due to over-investment in key sectors. In particular, the economic scale has made more investment to attract lower-level customers and international customers.
Revenue measurement
But despite Alibaba’s total revenue growth during this period, it did not reach the forecast. In the July-September quarter, Alibaba’s revenue grew by about 29 percent to 200.7 billion yuan.
Single day trading
Alibaba’s Single Day Business has recorded the most trade this year, but the lowest trade growth in the last 10 years. There are two reasons for this, one is that Alibaba did not advertise as big as it did this year, and the other is that the China retail market is already experiencing excessive impact.
Evergrande’s bad situation .. China’s real estate companies faltering ..!
The nations of the world may have been a little shocked by the name of Evergrande. Because in China, the world’s first economy today, Evergrande was the largest real estate giant.
The company is facing a major crisis due to the credit crunch. It was reported at the time that it had to pay Rs 84 million in interest on the bonds alone.
On the one hand, is this the case for the world’s largest real estate company? Despite the shock, it is noteworthy that the Evergrande Group has a foothold not only in the real estate sector but also in many other fields.
Evergrande Group Stock Sale
Evergrande, which has been in the midst of debt problems, has said it will sell its entire stake in Henten Network Group, which provides its streaming services. The stock is valued at $ 273.5 million. The real estate company has stepped up its efforts to alleviate the debt crisis.
Maturity of bonds
However S&P Global Ratings has given this highly likely rating even up to now. It’s likely to face a major test in March and April next year. Because $ 3.5 billion worth of bonds are about to mature.
What is possible?
And Evergrande will be back to normal soon. One side says we still believe in it. Evergrande, on the other hand, has now lost the ability to sell new homes. Its main business model is dysfunctional. So it is difficult to repay the loan. It is said to be impossible.
Borrowing business
Evergrand, China’s largest company, has borrowed more than $ 300 billion to expand. Meanwhile, the Chinese government last year introduced new rules on the amount of debt owed by real estate companies. Thus the company is stumbled by not being able to face the interest costs on the loans it has purchased. In this situation various measures are being taken to reduce the debt burden.