Chinese ecommerce company Alibaba Group Holding Limited (NYSE:BABA) reported its March quarter financial results on Thursday. Its revenue for the fourth quarter ending on 31 March 2015 was US$2.811bn (RMB17.425bn), an increase of 45 per cent compared to the previous corresponding period. Net income attributable to ordinary shareholders fell 48 per cent to US$467m (RMB5.543bn). Quarterly earnings per share were US$0.18 (RMB1.12), a decrease of 53 per cent. Income for operations in the quarter came to US$419m, a decrease of 52 per cent. The fall in income for operations was primarily due to a US$747m share-based compensation expense in the quarter. Around two-thirds of the company’s sales come from its consumer-to-consumer marketplace Taobao.
Alibaba also announced that Chief Executive Jonathan Lu will step down and be replaced by Daniel Zhang. The company’s new CEO said that although its share price has fallen significantly below record highs, the company is showing strong growth and momentum. “Well, as we always said during our IPO, and Alibaba manage our business by creating value for the long-term customers, by creating value for the participants in the entire ecosystem. So we believe that we will – investors will like us as long as we continue our belief and continue our creating value for the customers.” Alibaba posted strong growth in its new ventures, including its Mobile GMV, which accounted for 51 per cent of total GMV and was up 42 per cent from the previous quarter.
Last year, Alibaba recorded the largest initial public offering in the world after it announced that its underwriters would exercise an option to purchase additional shares at the $68 IPO price. This boosted the company’s market capitalisation from $21.8bn to $25bn. Shares of BABA surged 7.50 per cent on Thursday, to $86.00 per share. This is 39 per cent lower than the all time high reached in November of last year.
May 08, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian. Simon worked for Wise-owl from 2013 until January 2020.