Alibaba has reassured investors with a solid rise in profits as the Chinese e-commerce giant released its first earnings report since successfully completing the world’s biggest stock offering in September.
The company, whose services are similar to those offered by US internet titans Ebay, PayPal, and Amazon, said on Tuesday its third quarter net profit rose by 15 per cent to $US1.1 billion.
Adjusted earnings per share, the benchmark used in the US where Alibaba is listed since its $US25 billion stock offer, came in at 45 cents, a 9.4 per cent increase in line with analyst expectations.
Revenue soared by 53.7 per cent from the same quarter last year to $US2.7 billion, beating analyst forecasts, and the number of active buyers rose by 52 per cent.
However, using compatible GAAP accounting measures its net profit slid nearly 39 per cent which the company said was due to a stepped up writedown in the value of intangible assets and share-based compensation charges.
“We delivered a strong quarter with significant growth across our key operating metrics,” Alibaba Group CEO, Jonathan Lu, said in a statement.
Headquartered in the eastern city of Hangzhou, Alibaba operates China’s most popular online shopping platform, Taobao, which is estimated to hold more than 90 per cent of the online market for consumer to consumer transactions.
As it does not sell products directly, but acts as an electronic middleman, Alibaba has been able to generate enviable profit margins.
The company also seems to be managing well the transition to mobile devices.
It pointed to a staggering 1000 per cent rise in revenue generated from people accessing its services via mobile devices, to $US606 million.
Mobile now accounts for 35.8 per cent of sales by one measure, up from 32.8 per cent in the previous quarter and 14.7 per cent one year ago.
“We extended our unrivalled leadership in mobile with 217 million monthly active users on our mobile commerce apps in September,” said Lu.
That represented a 15.4 per cent gain from the previous quarter and a 139 per cent jump from one year ago.
Chinese operations accounted for four-fifths of revenue, although its international businesses continued to expand strongly.
There was considerable concern before Alibaba’s September 19 flotation whether there would be sufficient appetite for the IPO to avoid being a flop.
The company’s shares have risen from the $US68 offering price to close at $US101.80 on Monday evening, putting its market capitalisation at $US251 billion, above the $US246 billion of bricks and mortar retail leader Walmart.
AFP
