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China’s Alibaba Q1 net profit up 34%

China’s Alibaba Q1 net profit up 34%
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First Published: Thu, May 13 2010. 03 50 PM IST
Updated: Thu, May 13 2010. 03 50 PM IST
Shanghai: Alibaba.com, China’s largest e-commerce commerce, reported a 34% rise in quarterly profit to notch its best results in a year as it signed up more businesses for its online services.
Alibaba.com, which operates online sites connecting millions of buyers and sellers globally, is the listed unit of Alibaba Group, in which Yahoo holds a nearly 40% stake.
Alibaba.com said it was cautiously optimistic about the global economic recovery for the year and expects more of its users to adopt its value-added services.
The company competes with Global Sources in China’s 1.5 billion yuan business-to-business (B2B) marketplace industry.
Web commerce in China has surged in recent years, as buyers tap the Internet for better deals from more suppliers in the nation’s highly fragmented distribution networks.
Alibaba.com said its January-March profit rose 34% to 330 million yuan from a restated 246.7 million yuan. That beat the average analyst forecast of 277.9 million yuan, according to Thomson Reuters.
Total revenue grew 49.3% to 1.22 billion yuan. Deferred revenue and customer advances for the quarter, a key measurement of future performance, rose 43.6%.
Last month, chief executive David Wei told Reuters he expected revenue growth to accelerate this year, while margins were likely to begin improving in 2011 after coming under pressure due to the company’s expansion.
Earlier this year, Alibaba.com cut basic membership fees for its China marketplace, its domestic website, and bought web-hosting company HiChina for $63.8 million in an effort to attract small businesses in China to its platform.
Alibaba.com shares closed up 1.76% on Thursday. The stock is down 17% this year in Hong Kong’s Hang Seng Index which is down 7%.
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First Published: Thu, May 13 2010. 03 50 PM IST