(Yicai) Nov. 17 -- Shares of Alibaba Group Holding plunged after the Chinese e-commerce giant said it will not fully spin off its cloud business because of impacts from restrictions on the export of US chips.

Alibaba [HKG: 9988] was trading down 10 percent at HKD73.25 (USD9.40) as of 1.45 p.m. in Hong Kong today. The firm's New York-listed stock [NYSE: BABA] closed 9.4 percent down at USD79.11 yesterday.

"The expansion of US restrictions on the export of advanced computing chips has created uncertainties for the prospects of Cloud Intelligence Group," Alibaba said yesterday in its third-quarter earnings report. "We believe that a full spin-off of Cloud Intelligence Group may not achieve the intended effect of shareholder value enhancement, so we have decided not to proceed with a full spin-off."

"Alibaba will continue to invest strategically in Cloud Intelligence Group in the long term," said Eddie Wu, chief executive officer of the cloud business. "At the same time, Cloud Intelligence Group will continue to maintain its independent operation, to be managed by its CEO and overseen by its board."

In March, Alibaba split itself into six businesses -- Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Network, International Digital Commerce Group, and Digital Media and Entertainment Group. In May, the company announced it would spin off its cloud, logistics, and grocery arms for separate listings.

In yesterday's earnings report, Alibaba also announced that the initial public offering plan of its grocery arm Freshippo has been put on hold to evaluate market conditions and other factors.

Meanwhile, Alibaba added that its logistics business Cainiao Smart Logistics has applied for an IPO in Hong Kong, and its international business group Alibaba International Digital Commerce Group is preparing for external fundraising.

Moreover, the family trust of Alibaba's founder Jack Ma also announced yesterday a plan to cut 10 million its holdings of Alibaba's American depository shares, with an estimated value of USD800 million.

Alibaba's Third-Quarter Earnings

Alibaba yesterday reported a net profit of CNY27.7 billion (USD3.8 billion) in the third quarter of the year, compared with a net loss of CNY22.5 billion a year earlier. Revenue rose 9 percent to CNY224.8 billion (USD30.8 billion) in the period.

"Alibaba delivered a solid quarter, marked by renewed momentum and energy across multiple businesses as a result of our strategic reorganization," said Wu, who is also Alibaba's CEO. "Through a more flexible organizational governance mechanism, we aim to capture brand new opportunities from the ongoing artificial intelligence technological transformation and create more value for our customers."

"Under our capital management plan, we are prioritizing investment in technology and innovations for our businesses to drive new growth," said Toby Xu, Alibaba's chief financial officer. "We are confident in our business fundamentals and are pleased to announce our first annual dividend distribution for the fiscal year 2023, with an aggregate amount of approximately USD2.5 billion, as part of our continued efforts to enhance shareholders' return in addition to the ongoing share repurchase program."

Alibaba's revenue from Cloud Intelligence Group inched up 2 percent to CNY27.6 billion in the three months ended Sept. 30 from the same period last year. Revenue from Cainiao Smart Logistics Network and Local Services Group soared 25 percent and 16 percent to CNY22.8 billion and CNY15.6 million (USD2.1 million), respectively.

Editor: Futura Costaglione