Alibaba Health slumps over 11% on expected interim loss
08:26, 26 October 2021
China’s Alibaba Health Information Technology was the worst performer on Hong Kong’s Hang Seng index on Tuesday after the company said it expects a half-year net loss.
The company said it expects to record a net loss of not more than CNY320m ($50.1m) for the six-months ended 30 September compared to a profit of CNY279m posted a year ago.
Hong Kong-listed shares in Alibaba Health tumbled over 11% to HKD10.96 by Tuesday afternoon, its biggest intraday fall since mid-August.
Decreased operating margin
Alibaba Health added that the company saw a decrease in operating margin for its direct sales business amid expansion of market share in online business-to-consumer drug sales.
The company, which provides internet solutions for the medical and pharmaceutical industry, said it had increased investment in its ‘‘Dr. Deer’’ app and health insurance business.
A rise in investment in its drug supply chain capabilities, including drug storage and logistics, has also attributed to the expected loss, the company said.
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Year-to-date losses near 50% as of Tuesday’s close
The Hong Kong-based company added that an increase in unrealised gain on investments has partially offset losses.
Tuesday’s slump took Alibaba Health’s year-to-date loss in its shares to nearly 50%.
Shares in the company’s controlling shareholder, Alibaba Group, fell 2.6% to HKD169.40 in Hong Kong on Tuesday.
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