Alibaba Shares Jump 6% on Year-end Results Despite Slowed Momentum

Jeannie Matthews
February 1, 2019

Alibaba typically posts its highest revenue in the December quarter, due to its mega Singles' Day in November - the world's biggest online sales event that outstrips the sales of U.S. shopping holidays Black Friday and Cyber Monday combined. Alibaba reported its slowest quarterly revenue growth since 2016 but otherwise cheered investors with its fourth-quarter report. In December, Alibaba agreed to increase its stake in the Pictures company to 50.92 percent from 49 percent, by subscribing to HKD 1.25 billion in new shares.

Alibaba dominates China's emerging consumer culture and its corporate results were widely anticipated for any signs that a worsening Chinese economic slowdown and the United States-China trade tussle were turning off shoppers.

However Alibaba's net income rose 33 per cent to reach 30.9bn yuan, topping estimates of 22.1bn yuan and sending its share price up two per cent in pre-market trade.

"For our businesses in e-commerce, consumer services, entertainment and cloud computing, the primary growth driver is not exports but domestic consumption and corporate transformation".

The second most valuable public firm of Asia published revenue amounting to 117.28bn yuan (£13.4 billion) for the three months to the 31st of December, compared to 83 billion yuan that was recorded a year earlier.

During the quarter, the company held in November its tenth Singles' Day, a shopping holiday that brought in $30 billion in gross merchandise value within 24 hours.

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Alibaba said that was primarily driven by increased spending from enterprise customers.

Chief Executive Daniel Zhang said the company remains optimistic, adding that younger buyers were driving sales.

China's economy posted a 6.6% expansion in 2018, the slowest in 28 years, as factory activity and domestic demand tapered.

The company's core commerce increased 40% year-over-year and its cloud computing increased a whopping 84% YoY.

Alibaba has grown at a breakneck pace since it was founded 20 years ago, establishing itself as the largest e-commerce company not just in China, but in the world.

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