Alibaba Sees Stocks Slide After Projecting Slow Growth By

© Reuters.

By Gina Lee – Alibaba (NYSE:) Group Holding (HK:) saw its shares slide after projecting slow revenue growth in 2020.

The Chinese e-commerce giant forecast sales growth of around 27.5% to CNY 650 billion ($91.1462 billion) for the year on Monday, below analyst estimates and down from the previous sales growth of 35%.

Meanwhile, rival JD (NASDAQ:).com forecast better-than-expected results for the second quarter.

The company has lost more than $70 billion of its market value since the virus outbreak in January. It posted a March quarter revenue of CNY 114.3 billion. Although the revenue beat expectations, it was Alibaba’s slowest pace of expansion since records started.

The slowing growth reflects a tepid outlook for China’s economic recovery from the economic impact of COVID-19, added to fears of ever-escalating U.S.-China tensions.

China formally tabled new national security laws for Hong Kong and Macau at the opening session of the National People’s Congress on Friday, with U.S. President Donald Trump threatening strong action should the laws be enacted. The news triggered protesting in Hong Kong on Sunday, with police firing tear gas and a water cannon.

Chinese foreign Minister Wang Yi warned that the U.S. was edging towards a “new Cold War” with China on Sunday.

Taiwan, an ongoing spat about the origins of COVID-19 and Hong Kong are issues ramping up tensions between the two countries, threatening to derail a hard-fought phase one trade deal and further contributing to Alibaba’s slow revenue growth.

Alibaba’s Hong Kong stock lost 1.72%to HK$194.80 ($25.11) by 1:22 AM ET (6:22 AM GMT) after shedding up to 4% earlier in the session.

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