Alibaba Group Holding Ltd’s (阿里巴巴) second-quarter revenue beat analysts’ estimates as China’s biggest online shopping company boosted advertising to fend off a slowing economy. Shares surged.
Sales rose 32 percent to 22.2 billion yuan (US$3.5 billion) in the three months ended last month, the company said yesterday.
That compares with the 21.3 billion yuan average of estimates compiled by Bloomberg.
Net income surged to 22.7 billion yuan after recognizing an accounting gain on an affiliate.
New cloud-based services for merchants and partnerships with retailers including electronics chain Suning Commerce Group Co (蘇寧電商集團) are helping boost ads and limit the impact of a slowing Chinese economy.
Increased promotions on Alibaba’s Tmall.com and Taobao Marketplace (淘寶) are driving sales ahead of next month’s Singles’ Day, the country’s biggest shopping event.
“Alibaba is tweaking its payments for search terms, which helped generate more money from advertisers,” Hong Kong-based Arete Research Services LLP analyst Li Muzhi said. “Investors are expecting things to improve at Alibaba as the economy in China improves with more stimulus policies.”
The profit result include a 18.6 billion yuan gain on its stake in Alibaba Health Information Technology Ltd (阿里健康).
Shares rose more than 8 percent in pre-market trading. The stock on Monday closed at US$76.35 in New York.
The stock has surged 29 percent so far this month and is on pace for its best month since last year’s initial public offering.
The company this month offered US$4.6 billion for the rest of Youku Tudou Inc (優酷土豆) to stream more video content to Chinese Internet users through control of the YouTube-like site.
Alibaba is investing more in online-to-offline services, or 020, in competition with rivals Tencent Holdings Ltd (騰訊) and Baidu Inc (百度). That includes investing in Didi Kuaidi (滴滴快的), China’s biggest taxi-hailing application, and backing the merger of group buying platforms Meituan.com and Dianping.com.
Even as China’s economy heads for its slowest growth in 25 years, billionaire chairman Jack Ma (馬雲) is pushing ahead with acquisitions.
The company has participated in almost US$15 billion of deals announced this year, about triple the number for all of last year, according to data compiled by Bloomberg.
Buying Youku is part of Alibaba’s plans to reach more of the 594 million Chinese who access the Internet from mobile devices and are hungry for online content.
Gross merchandise volume in China, Alibaba’s largest business, rose 28 percent to 713 billion yuan in the quarter.
Mobile revenue almost tripled to 10.5 billion yuan
“We are winning in mobile and remain focused on our top strategic priorities, including internationalization,” chief executive officer Daniel Zhang (張勇) said in the statement.
While mobile platforms help capture the millions of consumers shopping on smartphones and tablet computers, the smaller screens typically generate less advertising revenue.
Singles’ Day on Nov. 11 seeks to lure bargain shoppers, and the promotion last year had five times the sales of Cyber Monday in the US.
Alibaba also faces renewed pressure about selling counterfeits on its Web sites, with the American Apparel and Footwear Association requesting that Taobao Marketplace be put back on a US government “Notorious Market” list that shames intellectual property rights violators.
International sales rose 14 percent to 1.8 billion yuan, the company said.
Michael Evans, a former Goldman Sachs Group Inc partner, was named president in August to lead the company’s global push.
Revenue from cloud computing more than doubled to 649 million yuan, Alibaba said.
The company’s Alicloud unit has added data centers in the US and plans expansion in Europe to capture processing and storage demand from governments and companies.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day