Alibaba evaluates response to shelved Ant IPO as quarterly revenue rises 30 per cent
- The e-commerce giant’s revenue for the quarter ended September 30 reached US$22.8 billion to beat market estimates
- As China’s largest e-commerce company, Alibaba’s financial results are seen as a bellwether of consumer spending in the world’s most populous country
Hangzhou-based Ant Group, operator of Alipay, was projected to raise up to US$39.7 billion in the world’s largest IPO in Shanghai and Hong Kong, which was scheduled on Thursday.
A meeting earlier this week between Ant Group’s senior executives and China’s top financial regulators led to a “significant change” to the company’s business environment, which may result in the firm not fulfilling the listing requirements or disclosure rules, according to its statement to the two bourses.
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Alibaba on Thursday reported revenue of 155.1 billion yuan (US$22.8 billion) in its financial second quarter, up from 119 billion yuan a year ago, which was slightly ahead of the 154.8 billion yuan consensus from a Bloomberg survey of analysts’ estimates.
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As China’s largest e-commerce company, Alibaba’s financial results are seen as a bellwether of consumer spending in the world’s most populous country and an important barometer of its economic health.
Hangzhou-based Alibaba’s shares, which have risen 42.2 per cent since the start of the year, closed up 6.3 per cent to HK$294.60 on Thursday before the firm’s latest quarterly results were announced.
Annual active consumers on the company’s vast China retail marketplaces reached 757 million, an increase of 15 million from the 12 month period ended June 30. Mobile monthly active users on these marketplaces reached 881 million in September, an increase of 7 million from the end of June.
“Our domestic core commerce business continued to grow steadily during the post-Covid-19 environment in China through higher purchase frequency and consumer spending,” said Maggie Wu Wei, Alibaba’s chief financial officer, in the statement. She said cloud computing revenue grew 60 per cent year on year, “driven by the acceleration in digitalisation across all industries and businesses of all sizes in China”.
The growth in consumer spending augurs well for company during the world’s largest shopping festival in China.
Alibaba, parent company of the South China Morning Post, has extended the campaign period for its annual 11.11 Global Shopping Festival – an event that co-opts the Singles’ Day celebration across the country on November 11 – with more than 250,000 domestic and foreign brands taking part in its programme. A new sales window was added from November 1 to 3, ahead of the main event on November 11, to provide more opportunity for new brands and small businesses, according to Alibaba.
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Revenue from Alibaba’s core commerce business, which includes Southeast Asian platform Lazada and Cainiao logistics services, totalled 130.9 billion yuan or 84 per cent of overall sales.
Alibaba Cloud made up 10 per cent of the group’s quarterly revenue, with sales of 14.9 billion yuan.
In the same conference call on Thursday, Wu said Alibaba Cloud is expected to turn a profit in the second half of the current financial year to March. Alibaba Cloud is ranked by research firm Gartner as the world’s third-biggest infrastructure-as-a-service provider in 2019, behind Amazon Web Services and Microsoft Corp’s Azure.
Zhang said Cainiao, the smart logistics network business of Alibaba, is also expected to achieve positive operating cash flows in the e-commerce giant’s financial year to March.
Alibaba’s digital media and entertainment operations had revenue of 8.1 billion yuan in the past quarter, while the unit for innovation initiatives and others pulled in 1.2 billion yuan.