Alibaba Q1 net jumps 51pc to 34b yuan, beats expectations

Chinese e-commerce giant Alibaba (9988) witnessed a 51 percent annual increase in net profit for the quarter ending on June 30, reaching 34.33 billion yuan (HK$37.29 billion), surpassing the expected 28.66 billion yuan.

Meanwhile, the first-quarter revenue (fiscal year 2023-2024) also beat analysts' estimates as consumer sentiment improved from the same time a year earlier when there were strict pandemic-related lockdowns.

Alibaba posted revenue of 234.16 billion yuan in the quarter, compared with analysts' estimates of 224.92 billion yuan, according to Refinitiv data. The latest revenue figure represents an improvement from flat to 3 percent growth in the past four quarters.

Revenue in the first quarter to end-June was helped by a recovery in consumer purchases on Alibaba's Taobao and Tmall marketplaces, boosted in part by the 618 shopping festival, China's second-largest online shopping event, in June.

Customer management revenue, which tracks how much merchants spend on Alibaba, rose 10 percent to 79.7 billion yuan, thanks to an increase in merchants' willingness to invest in advertising and higher sales during the festival.

Sales at Cloud Intelligence Group, its main growth driver outside of e-commerce, reported the smallest revenue growth among the group's six business units of 4 percent, but the division's underlying profit more than doubled as its workplace collaboration tool, Dingtalk, helped to reduce costs.

This was the last earnings announcement under Alibaba chief executive officer and chairman Daniel Zhang, who will step down from the roles in September to focus on leading its cloud division.

The CEO role will be handed over to Eddie Yongming Wu, chairman of Alibaba's Taobao and Tmall Group, while Executive Vice Chairman Joseph Tsai will take over as chairman.

Regulatory concern has eased for China's tech giants, including Alibaba, this year, with Chinese authorities keen to boost private sector confidence. But China's sputtering economy and mounting competitive pressure from smaller rivals such as PDD Holdings and Douyin, the Chinese version of TikTok, pose major challenges to Alibaba.

This was the first set of quarterly results for the US$241 billion (HK$1.88 trillion) market-value behemoth since it split its business into six units, which many experts said could ease scrutiny over the tech giant.