Alibaba profit triples as sales surge
E-commerce leader's results for first quarter, revealed by Yahoo, spur interest in IPO plans
Alibaba, China's largest e-commerce company, tripled first-quarter earnings on surging sales amid expectations it will seek an initial public offering this year.
Net profit rose to US$669 million in the three months to March from US$220 million a year earlier, US internet giant Yahoo, which owns a stake in the Hangzhou, Zhejiang-based company, said in a presentation on Tuesday after reporting its own earnings. Alibaba spokesman John Spelich declined to comment on the disclosure by Yahoo.
Alibaba, with services connecting businesses to each other as well as consumers, is expanding online loans, securing financing and making acquisitions, fuelling speculation of an IPO this year. The valuation could reach US$62.5 billion, according to the median of eight estimates by investment banks and research firms since February.
"Their earnings were driven by the online payment system and China's booming commerce," said Billy Leung, an analyst at RHB Research Institute. "I am still more bullish on the Chinese e-commerce market. It's still in the early stage and will become more mature, and Alibaba will continue to benefit."
First-quarter gross profit at Alibaba almost doubled to US$1.02 billion and sales rose 71 per cent to US$1.4 billion, the Yahoo filing said. Yahoo reported earnings for the quarter to June and recognises the contribution of Alibaba for the prior quarter.
Spelich said Alibaba had no timetable for an IPO and that the company had not hired bankers and had not selected a location for a prospective public offering.
Alibaba, formed in 1999 as an online marketplace for Chinese companies, has grown as the wave of economic liberalisation spurred a boom in manufacturing and trade. It expanded its workforce to more than 24,000 and added services including cloud computing, online payments and consumer auctions.
The company's founder, Jack Ma Yun, said last year the firm might go public within five years. Proceeds from the sale would be used along with additional cash to buy back stock held by Yahoo, a source said in May. Alibaba chief executive Jonathan Lu Zhaoxi told the China Daily last week IPO proceeds would help fund acquisitions.