Alibaba.com profit falls less than expected, eyes M&A

Alibaba.com profit falls less than expected, eyes M&A
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First Published: Thu, Aug 13 2009. 03 52 PM IST
Updated: Thu, Aug 13 2009. 03 52 PM IST
Shanghai: China’s top e-commerce firm, Alibaba.com, posted a 34.2% fall in quarterly net profit on Thursday as margins fell and on higher investment costs, but its earnings beat analysts’ expectations. Alibaba.com will also issue a special dividend of HK$0.20 a share to be paid out to shareholders around 9 September.
Alibaba’s net profit for the second quarter came in at 260.7 million yuan ($38.2 million) versus 396.5 million yuan a year earlier.
Excluding one time gains, Alibaba.com said its quarterly net profit fell 16.9%.
Alibaba, which operates an online site connecting millions of buyers and sellers, said it had a strong cash position to make acquisitions even after the special dividend payout.
“In the last few months we have been exploring investment opportunities and we are relatively close to be making some announcements in the coming months,” David Wei, chief executive of Alibaba.com, told reporters in an earnings conference call.
“After the dividend pay out we still have more than 6 billion RMB, which should be sufficient for any investment in the short term,” he said.
Wei said the acquisition targets were not global, declining to give more details.
Alibaba posted strong revenue growth of 23.6% on the back of record-high quarterly net additions to its premium fee-paying service, Gold Supplier.
According to Analysys International, China’s B2B e-commerce market was valued at 1.4 billion yuan in the second quarter of 2009. Alibaba.com had 62.2% of market share.
Alibaba.com’s Wei said early this month the company may set up an Indian joint venture with India’s Infomedia 18 to help it manage its B2B platform.
India is the firm’s second-biggest overseas market in terms of members behind the United States. The firm also recently announced plans to launch its first sales and marketing campaign in the United States with the slogan “Find It. Make It. Sell It.”
Alibaba.com is the listed unit of Alibaba Group, which is 40% owned by search firm Yahoo Inc.
Alibaba’s shares have more than tripled this year, outpacing the 45% rise on the Hong Kong Stock Exchange.
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First Published: Thu, Aug 13 2009. 03 52 PM IST