Alibaba Leads Chinese Tech Giants in Boosting Shareholder Returns, But Economic Challenges Loom: Report

Alibaba Group Holding Ltd BABA, Tencent Holdings Ltd TCEHY, and JD.com Inc JD are poised to offer insights into China’s economic and consumer sentiment as they report earnings amid a challenging landscape.

While these companies are set to release their earnings, they remain focused on enhancing shareholder returns.

This could mean more stock buybacks as part of their strategies, Bloomberg cites analysts from Bloomberg Intelligence.

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With its robust balance sheets, the Chinese tech sector has accumulated significant cash reserves, enabling companies like Alibaba, Tencent, and JD.com to continue rewarding shareholders despite economic uncertainties.

Alibaba’s board approved a $4.0 billion dividend for fiscal year 2024. However, JD.com used $2.14 billion in free cash flow for the first quarter and held $24.8 billion in cash and equivalents.

China’s slowing economy is affecting the operations of these tech giants. For instance, Tencent’s advertising, fintech, and business services are susceptible to the nation’s economic performance.

Meanwhile, Alibaba and JD.com have been increasing their spending on consumer perks and discounts to stimulate sales growth.

Alibaba stock lost over 15% in the last 12 months. JD.com lost over 31%.

Price Action: BABA shares traded lower by 0.92% at $79.57 at the last check on Friday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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