ALIBABA Q1 REVENUE SOARS 61pc TO 80.9b YUAN
HONG KONG: Alibaba Group Holding Ltd reported its fastest pace of growth in more than four years by wringing more revenue from its push into cloud computing and entertainment, mitigating the slowdown of its most lucrative business.
Billionaire chairman Jack Ma’s free-spending ways helped the e-commerce heavyweight sidestep a Chinese economic slowdown and fallout from the United States-China trade battle.
But competition from rivals backed by Tencent Holdings Ltd was hitting the lucrative fees it charged to help merchants with marketing, a measure known as customer management revenue, and creating a threat to future profit.
Alibaba shares whiplashed after the results as early gains were erased and the stock closed more than three per cent lower.
While revenue growth was strong, Alibaba’s profit fell with a surge in compensation expenses and the company announced more than US$3 billion (RM12.3 billion) in new funding for its newly acquired food delivery arm.
Revenue at China’s biggest e-commerce company climbed 61 per cent to 80.9 billion yuan (RM48.3 billion) in the three months ended June, matching the average estimate.
Alibaba’s mounting spending, such as on acquisitions and expanding its Hema supermarket chain, was hurting margins.
Adjusted earnings per share of 8.04 yuan fell short of the 8.19 yuan estimate.
Net income slid 41 per cent to 8.7 billion yuan, though that’s after taking into account an increase in the valuation of affiliate Ant Financial.