Alibaba Beijing Office
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Chinese e-commerce giant Alibaba Its September quarter profit beat forecasts on Friday, but sales fell short of expectations as a downturn in the world’s second-largest economy hit consumer spending.
Alibaba said its net profit for the quarter ended Sept. 30 rose 58% year-on-year to 43.9 billion yuan ($6.07 billion) due to the performance of its equity investments. This compares with the London Stock Exchange Group’s (LSEG) forecast of $25.83 billion.
“The year-over-year increase was primarily attributable to changes in the mark-to-market value of our equity investments, lower investment impairments and higher operating income,” the company said of the annual profit increase in its income statement.
Meanwhile, revenue was 236.5 billion yuan, up 5% year-on-year, but lower than analysts’ forecast of 238.9 billion yuan, according to London Stock Exchange Group.
The company’s New York-listed shares have risen so far this year, rising nearly 17% as of Friday. The stock was up 5% in pre-market trading at 12:02 pm London time following the release of its quarterly earnings report.
Investors are paying close attention to the performance of Alibaba’s main business units Taobao and Tmall Group. The company reported a 1% annual increase in second-quarter revenue to 98.99 billion yuan.
The results come at a tricky time for Chinese businesses, given the country’s tepid retail environment.
The market is currently paying attention to whether Beijing will adopt a series of stimulus measures in the near future, including a five-year economic stimulus plan The 1.4 trillion yuan package announced last week, It will help revive the country’s growth and stem the long-term slump in the real estate market.
So far, the impact on the retail sector looks promising, with sales growing 4.8% better than expected Annual growth in October comes as China’s recent Singles Day shopping holiday – widely seen as a barometer of consumer confidence across the country – regained some luster.
Alibaba touts “strong growthDuring the holiday season, its Taobao and Tmall Group businesses saw gross merchandise volume (an industry metric that measures sales over a period of time and does not equate to a company’s revenue), as well as “a record number of active buyers.”
“Alibaba’s prospects remain closely tied to the trajectory of the Chinese economy and changing regulatory policies,” ING analysts said on Thursdaypointed out that the company’s report on Friday will reveal the growth momentum of China’s economy.
At the same time, the sales of overseas online shopping businesses such as Lazada and AliExpress increased by 29% compared with the same period last year, reaching 31.67 billion yuan.
This breaking news story is being updated.
