Alibaba reports first quarterly loss since going public

China’s top e-commerce platform Alibaba Group Holding Ltd on Thursday posted its first quarterly operating loss since going public in 2014 due to a record anti-monopoly fine by the country’s market regulator.

Its United States-listed shares fell nearly 3 percent in choppy trading, even as the company forecast strong 2022 revenue, betting that the coronavirus pandemic-driven shift to online shopping will remain resilient.

The outlook, however, was overshadowed by a regulatory crackdown in China that led to the suspension of a $37bn initial public offering of its affiliate Ant Group and a $2.8bn fine in April for anti-competitive business practices.

The fine led to a 7.66 billion yuan ($1.19bn) operating loss in the fourth quarter ended March 31.

“The Penalty Decision motivated us to reflect on the relationship between a platform economy and society, as well as our social responsibilities and commitments,” Chief Executive Daniel Zhang said in an earnings call.

Alibaba forecast annual revenue of 930 billion yuan ($144.12bn) for the year ending March 2022, above the expectation of 928.25 billion yuan.

Core commerce revenue rose 72 percent to 161.37 billion yuan ($25bn) in the fourth quarter. But growth at its cloud computing unit slowed to 37 percent to 16.8 billion yuan ($2.60bn) from 58 percent a year earlier, its weakest since at least 2016.

Alibaba said it was due to a top customer with a “sizeable presence outside of China” ending its business for “non-product related reasons.”

Overall revenue rose to 187.4 billion yuan ($29.03bn) in the fourth quarter, topping a Refinitiv forecast of 180.41 billion yuan ($27.95bn).

Alibaba’s US-listed shares have fallen more than 30 percent since hitting a record high in late October when its founder Jack Ma delivered a speech in Shanghai criticising China’s financial regulators.

The sinking share price reflects investor anxiety over regulation, said Brock Silvers, chief investment officer at Hong Kong-based Adamas Asset Management.

“The company has faced rogue waves of regulatory risk, which now threaten the entire tech sector.”