Tuesday, July 14, 2020
Martin Hennecke

Alibaba sounds alarm as profit soars 58pc
Alibaba (9988) reported better-than-expected quarterly revenue ended last year driven by record Singles' Day results but warned that revenue growth will be negatively impacted in the current quarter. The company reported a 58 percent year-on-year rise in net income to 52.31 billion yuan (HK$58.17 billion). The company saw "robust growth" across the quarter, said chief executive officer Daniel Zhang Yong, adding that the company's digital economy reached new heights with last year's 11.11 Global Shopping Festival which generated 268.4 billion yuan of business. Revenue amounted to 161.46 billion yuan for the last quarter in 2019, up 38 percent year on year, compared with a 40 percent year on year growth during the previous quarter, versus projections for 159.5 billion yuan. The non-Generally Accepted Accounting Principles net income was 46.49 billion yuan, up 56 percent from a year ago. Diluted earnings per share during the quarter were 2.44 yuan, and non-GAAP diluted earnings per share were 2.27 yuan, an increase of 49 percent year on year. It is "really difficulty to have an estimate on March quarter" because it is only halfway through the period, chief financial officer Maggie Wu Wei said. "Overall revenue will be negatively impacted." Zhang explained that many merchants that work with the company have not been able to return to normal operations because of a shortage of employees. He warned that the core e-commerce business suffered a negative impact in the first two weeks after the Lunar New Year holiday. Restaurant orders and travel bookings have also taken hits. "It will present near term challenges to Alibaba's businesses across the board," he said on the conference call, adding that there will also be opportunities. Revenue from the internet giant's cloud computing services amounted to 10.7 billion yuan during the last three months in 2019, expanding by 62 percent over a year earlier. Core commerce revenue amounted to 141.5 billion yuan, increasing 38 percent year-on-year, driven by continued growth from China retail marketplaces. Mobile monthly active users in the company's China retail marketplaces totaled 824 million as of the end of last year, an increase of 39 million over end-September.

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