Alibaba June quarter net jumps to 47.5b yuan, China marketplaces and cloud thrive

 Alibaba Group Holding beat quarterly revenue and profit estimates on Thursday, as its core commerce and cloud computing businesses continued to grow following China’s emergence from the coronavirus lockdown.

Net income was 47.59 billion yuan (US$6.73 billion). Non-GAAP net income was 39.47 billion yuan (US$5.58 billion), an increase of 28 percent year-over-year.

Excluding items, the company earned 14.82 yuan per American depository share (ADS) versus expectations of 13.78 yuan, according to IBES data from Refinitiv.

Revenue was 153.75 billion yuan versus a forecast 147.77 billion yuan.

Cloud computing revenue grew by  59 percent year-over-year to 12.34 billion yuan (US$1.74 billion), mainly  driven by increased revenue contribution from both our public cloud and hybrid cloud businesses, reflecting higher average revenue per customer, Alibaba Group said.

Sales from the commerce business alone jumped by 34 percent to 133.32 billion yuan (US$19.27 billion) in the quarter ending in June, slightly slower than a year earlier but still enough to prod its shares higher after the results.

In June, the China retail marketplaces had 874 million mobile monthy active users, representing a quarterly net increase of 28 million.

Annual active consumers on China retail marketplaces was 742 million for the 12 months ended June 30, representing a quarterly net increase of 16 million. In June, Taobao Deals had about 40 million MAUs.

The company’s stock has soared 23 percent this year as investors globally poured money into technology businesses seen as “stay-at-home” winners from the pandemic, and Alibaba said it had bounced back from a hit to Chinese consumer spending at the start of this year.

“Our domestic core commerce business has fully recovered to pre-coronavirus levels across the board, while cloud computing revenue grew 59 percent year-over-year,” Chief Financial Officer Maggie Wu said in a statement.

Tmall online physical goods gross merchandise value, excluding unpaid orders, grew by 27 percent year-over-year during the June quarter. This was mainly driven by higher purchase frequency and increased new consumer acquisitions, reflecting the success of consumer segmentation and category expansion strategies, Alibaba Group said.

Fast-moving consumer goods, home furnishings and consumer electronics categories were the fastest growing categories during the quarter.

Tmall Global is the premier platform that helps overseas brands and merchants reach Chinese consumers directly, build brand awareness and gain unparalleled consumer insights.

During the quarter, Tmall Global GMV, excluding unpaid orders, grew over 40 percent year-over-year.

Alibaba is one of the big businesses seen as a potential target if President Donald Trump makes further moves against Chinese companies, following restrictions on Chinese-owned video platform TikTok and Tencent’s WeChat.

“Today, we face uncertainties from not only the global pandemic but also increasing tensions between U.S. and China,” Chief Executive Officer Daniel Zhang said.

“We are closely monitoring the latest shift in U.S. government policies towards Chinese companies which is a very fluid situation.”-Reuters/The Standard