Alibaba group holdingOf
The core e-commerce business continued to grow in the last quarter, as China recovered from the coronavirus virus crisis, although the company reported another operating loss in its closely watched cloud-computing division.
According to analyst estimates, group revenue grew 30.1% to 155.1 billion yuan ($ 22.8 billion) in three months. Alibaba’s US-listed share (ticker: BABA) fell 3.9% in premarket trading on Thursday.
background story. E-commerce companies have been among the commercial success stories of the coronavirus epidemic, and Alibaba, based in Hangzhou and listed in New York and Hong Kong, is no different. Millions of householders across the globe moved towards online shopping during the epidemic, leading to increased Alibaba sales.
The company reported revenue in the quarter, up 153 billion yuan compared to the same period last year, reflecting analysts’ expectations. Shares in Alibaba were trading at a high of $ 319 last month, with the stock up nearly 40% so far this year.
But shares were down 8% earlier this week, when the Chinese government intervened to block an initial public offering of $ 27 billion from homegrown fintech giant Ant. Alibaba is a third of Ant, which was founded by Jack Ma, who is the co-founder and former executive chairman of Alibaba.
Ant stock was scheduled to begin trading in Hong Kong and Shanghai on Thursday, and according to reports, the IPO could be set back in at least a few months.
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what’s new. On Thursday, Alibaba reported revenue of 155 billion yuan in the quarter. September 30, a 30% increase from the same period last year and slightly ahead of analyst expectations of 154.8 billion yuan.
The company said it had 757 million annual active users on Chinese markets, 15 million more than reported at the end of June, when it noted an increase of 16 million users.
Maggie Wu, its chief financial officer, said, “Our domestic core commerce business continued to grow during the post-Kovid-19 environment in China during high purchasing frequency and consumer spending.”
Quarterly revenue in its cloud computing division, an attention of analysts, increased by 60% over the previous year to 14.9 billion yuan. The segment incurred an operating loss of 3.8 billion yuan. During an investor day in September, the company said it expects the business to be profitable in at least one quarter of the 2021 fiscal year.
Daniel stated, “We effectively focus on our three long-term growth engines — domestic consumption, cloud computing and data intelligence, and globalization. Zhang, Group Chief Executive and President.
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looking ahead. Alibaba told investors that it would make a profit in its cloud-computing business this year, 11 years after entering the sector. The time for that fiscal year is now half over, with the segment reporting operating losses of more than double compared to the previous quarter. While its cloud revenue is showing impressive growth, the market is keenly looking to profit, and the pressure continues.
Next week is Singles Day, an informal holiday in China promoted by Alibaba, where consumers typically spend billions online. China’s economy is expected to grow 2% this year, but the limit for yields in consumer spending is still up in the air. Investors should see single-day sales as an indicator of both Alibaba and the broader Chinese recovery.
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