Alibaba confident of winning China’s instant commerce war as quarterly profit surges 78%

Alibaba Group Holding, China’s e-commerce and cloud computing services giant, on Friday reported a 78 per cent surge in profit for the June quarter, while “robust AI demand” led to a 26 per cent revenue growth for its cloud business.

Net income attributable to ordinary shareholders advanced 78 per cent to 43.1 billion yuan (US$6 billion) in the period, up from 24.3 billion yuan a year earlier, primarily due to “mark-to-market changes from our equity investments and gains from the disposal of the local consumer service business of Trendyol”, the Hangzhou-based company said. That was better than the 30.2 billion yuan expected by analysts surveyed by Bloomberg.

Total revenue rose 2 per cent to 247.7 billion yuan in the three months ended June 30, compared with the Bloomberg consensus estimate of 253.17 billion yuan. That marked the 12th consecutive quarter of year-on-year growth for the company. Excluding revenue from the disposed businesses of Sun Art and Intime, revenue on a like-for-like basis would have grown by 10 per cent.

Alibaba’s New York-listed shares gained more than 8 per cent in pre-market trading after the release of its latest financial results. The company’s Hong Kong-listed shares slipped 0.1 per cent to HK$115.70 on Friday, ahead of the earnings release.

“This quarter, our strategic focus on consumption and AI + Cloud delivered strong growth,” said Eddie Wu Yongming, CEO of Alibaba, which also owns the South China Morning Post.