Among the key news on Hong Kong stocks, Alibaba Group Holding Limited (HK:9988) completed a share buyback of $5.8 billion in the first quarter of FY25 (ended June 30, 2024) amid the selloff in the stock over the past year. This resulted in a net decline of 2.3% in its total outstanding shares. Alibaba’s Hong Kong-listed shares gained 3% in today’s trading session. These growing share buybacks reflect the company’s confidence in its prospects and aim to enhance its struggling share price.
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Over the last 12 months, Alibaba stock has lost 13.4% in trading.
Based in China, Alibaba is a technology company widely known for its online marketplace.
More Details About Alibaba’s Buyback
The buyback was implemented as part of Alibaba’s current program, which has $26.1 billion remaining and extends until Q1 2027. The latest buyback of $5.8 billion worth of shares marks an increase from $4.8 billion in the previous quarter. Also, the tech giant doubled the repurchases during Q1 FY25 compared to the $2.9 billion buybacks in the quarter that ended on December 31, 2023.
In FY24, Alibaba repurchased $12.5 billion worth of shares, reducing its total share count by 5%.
Earlier in May, Alibaba raised $5 billion through the issuance of convertible bonds, mainly to fund its buybacks. Currently, the company is walking on a tightrope, trying to balance its substantial share buybacks while maintaining its investments in new growth areas like generative artificial intelligence (AI).
Is Alibaba a Good Buy Now?
In 2023, Alibaba faced several challenges, including declining domestic sales, strong competition, and uncertainty regarding its plans to spin off its business units. Alibaba’s stock continues to decline so far this year, with a challenging path to recovery ahead. Nonetheless, analysts are moderately bullish on the stock.
On TipRanks, 9988 stock has received a Moderate Buy consensus rating from analysts, based on four Buy and two Hold recommendations. The Alibaba share price target of HK$93.62 indicates 33% upside potential.
