August 11, 2016 – China’s Alibaba Group Holding Ltd posted its best revenue growth since before the e-commerce titan’s listing in late 2014, lifting its shares to their highest level in a year.
But Alibaba was silent on the US Securities and Exchange Commission (SEC) investigation into its accounting practices, which have long been the subject of criticism.
In the three months to Jun 30, Alibaba also made more money from mobile shopping than from PCs for the first time, helping to send its shares up by more than five per cent to US$92.10 in New York, its highest level in more than a year.
“We never had any doubt that we would be able to deliver increasing monetisation of our users,” Executive Vice Chairman Joe Tsai told a post-earnings conference call.
“This is a decoupling of revenue from GMV (gross merchandise volume),” he said, referring to a measure of the total value of goods transacted on Alibaba’s online shopping platforms.
Despite GMV growth remaining low compared to previous years, rising 24 per cent to 837 billion yuan, Alibaba is squeezing more money out of its e-commerce business, chiefly from advertising.
That translated to quarterly revenues of 32.15 billion yuan (US$4.84 billion), a 59 per cent leap from the previous year and the highest growth rate since late 2013.
Chief Financial Officer Maggie Wu said the ratio of money Alibaba made from e-commerce transactions was higher for mobile users than non-mobile users for the first time, something investors had expressed scepticism about before its IPO.
Net income attributable to shareholders fell to 7.14 billion yuan, or 2.94 yuan per share, from 30.82 billion yuan, or 11.92 yuan per share, in the year-earlier quarter, when Alibaba deconsolidated its film business.
However, China’s flagging economic growth could threaten Alibaba, said Wedbush Securities’ Gil Luria. “If there is a slowdown in the Chinese economy … I don’t believe Alibaba is going to escape that,” Luria said.