Alibaba Group Holding Ltd share price up, reports better-than-expected quarterly results

Alibaba Group Holding Ltd reported second-quarter results above analysts expectations due to strong growth in its e-commerce operations.

In its first report to investors, after the all-time-record $25-billion listing in September, the Chinese behemoth stated a 53.7% increase in sales to RMB 16.83 billion in the three months ended September 30th, compared to RMB 10.95 billion last year.

Revenue from the China commerce retail business increased by 47.7% to RMB 12.76 billion, mainly driven by growth in online marketing service sales and commissions, while its wholesale business in the country reached RMB 790 million, an increase of 39.1% compared to last years results of RMB 568 million.

Meanwhile, the international commerce retail unit hit RMB 419 million in revenue, nearly doubled compared to last year, due to strong performance by AliExpress. International wholesale accounted for nearly RMB 1.2 billion worth of sales in the quarter, a 24% increase from the RMB 966 million a year earlier. The division results were boosted by increased number of paying members.

Mobile revenue increased more than ten times to RMB 3.72 billion and accounted for around 22% of total revenues, as Alibaba continued to expand in the industry.

However, net income fell 38.6% year-to-year to RMB 3.03 billion, or RMB 1.24 earnings per share. The company said the decline is mainly due to share-based compensation charges and an increase of amortization of intangible assets. However, non-GAAP net income increased 15% to RMB 6.81 million and RMB 2.79 diluted earnings per share.

Cost of revenue in the recent quarter was RMB 5.596 billion or 33.3% of revenue, compared year-on-year to RMB 3.001 billion, or 27.4% of revenue. The company explained that the increase was a result of investments made in Alibaba Cloud Computing and its data platform.

“We delivered a strong quarter with significant growth across our key operating metrics,” said Jonathan Lu, CEO of Alibaba Group. “Our business continues to perform well, and our results reflect both the strength of our ecosystem and the strong foundation we have for sustainable growth.“

Alibaba Group Holding Ltd gained 3.25% on Monday and closed at $101.80 in New York. The stock edged up 2.80% on Tuesday to trade at $104.65 at 16:04 GMT. The company is valued at $255.83 billion. According to the Financial Times, the 31 analysts offering 12-month price targets for Alibaba Group Holding Ltd have a median target of $112.00, with a high estimate of $125.00 and a low estimate of $75.00. The median estimate represents a 10.02% increase from the previous close of $101.80.