Alibaba jumps after seeing a big boost from the cloud

E-commerce company Alibaba Group Holding's revenue is expected to have risen 44 per cent during the December quarter of 2018
China slowdown weighs on revenue growth at internet giant Alibaba
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01 February, 2019

E-commerce giant Alibaba Group Holding Ltd reported quarterly profit far above market expectations and played down worries of Chinese economic slowdown and US tariff effects, sending its shares up 6 per cent. Analysts polled by FactSet expected the company to post 119.03 billion yuan.

Daniel Zhang, 47, said the slowdown had caused concerns in the market but Alibaba's ecommerce platforms showed that "Chinese consumption growth is still strong".

Tsai also brushed aside concerns about the trade war, saying people were overly anxious about its impact on China's economy.

Earnings increased 33 percent year-on-year to 31 billion yuan.

For the third quarter, Alibaba reported revenue of Dollars 17.05 Billion, increasing 41% year-over-year, while earnings was USD 1.77 per share. The cloud computing business continued at a strong growth rate, up 84 percent to revenues of CNY 6.61 billion, while digital media and entertainment slowed slightly to a 20 percent annual increase to CNY 6.49 billion. 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.

E-commerce giant Alibaba reported quarterly profit far above market expectations, sending its shares up 6 percent.

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"Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of almost 700 million consumers across retail, digital entertainment and local consumer services", he said in a statement today.

The company said that Alibaba Cloud will leverage the overall company's technologies for infrastructure, data management and services to broaden its services for enterprises.

Anticipating the headwind, Alibaba previously lowered its revenue outlook for its financial year ending March even before the top sales season.

Alibaba finance chief Maggie Wu said the profitability from the company's core commerce business allowed it to generate the money to continue to invest. The company is valued at about $430 billion.

China's economic growth in 2018 slowed to its weakest in almost three decades, amid faltering domestic demand and bruising U.S. tariffs.

Cloud computing is a bright spot for Alibaba.


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