Alibaba expected better-than-expected profit for its latest quarter as of Thursday, as the Chinese e-commerce giant continued to take advantage of the decrease in consumer spending.
The country saw 30% revenue growth for its fiscal second quarter driven by a continuous rebound in Chinese consumer spending after the outbreak of the COVID-19 outbreak. Alibaba posted revenue of RMB155.06 billion ($ 22.84 billion), up from RMB119.02 billion a year earlier. Analysts polled by FactSet estimate RMB154.87 billion.
“Our domestic core commerce business continued to grow during the post-Kovid-19 environment in China during high purchasing frequency and consumer spending,” said Maggie Wu, chief financial officer at Alibaba’s release. Total main commerce revenue increased to RMB130.92 billion from RMB101.22 billion a year earlier.
Shares are down 1.8% in Thursday trading.
Alibaba earned a net income of RMB28.77 billion, or RMB10.48 per US depository share, compared with RMB72.54 billion, or RMB27.51 per ADS a year earlier. On an adjusted basis, Alibaba earned RMB17.97 per ADS, while the FactSet consensus stood at RMB13.82 per ADS.
Don’t miss: Alibaba gets its Whole Foods with new $ 3.6 billion investment in Chinese supermarket operator
The company had 757 million annual active subscribers as of the September quarter, 742 million in the June quarter and 693 million in the prior September period.
Thursday was also to mark the first day of trading for shares of the ant-affiliated fintech giant, Ant Group, which were preparing to list in both Hong Kong and Shanghai. Instead, Alibaba’s earnings are taking center stage as ant listings were suspended earlier this week due to last-minute concerns by Chinese regulators.
Alibaba holds a 33% stake in Ant through subsidiaries, and its shares sold on Tuesday, according to reports of a suspended IPO. Susquehanna analyst Youssef Squali wrote in a note to clients on Tuesday that while the prospect of an Ant IPO has been “anticipated for years” and recently helped drive Alibaba’s shares to a higher level, the suspension “over BABA’s operations There is no direct effect. “
US-listed shares of Alibaba have gained 39% so far this year, such as the Crensher CSI China Internet ETF KWEB,
58% increase, and as the S&P 500 SPX,
An increase of 6.6%.