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Employees hold a meeting at the headquarters of Alibaba.com in Hangzhou, Zhejiang province. The largest e-commerce site in China reported a 29 percent rise in second-quarter profit. [Photo / Reuters]
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Q2 earnings climbed to more than 464.5m yuan, higher than analysts' expectations
SHANGHAI / HONG KONG - Alibaba.com, China's largest e-commerce company, beat forecasts with a 29 percent rise in second quarter net profit, its smallest rise in about 18 months, and warned that the adverse global economic outlook could hit its second half results.
Alibaba.com, the listed unit of Alibaba Group, which is 40 percent owned by Yahoo Inc, operates an e-commerce website that links Chinese small businesses looking to sell their goods to overseas buyers. That makes the company's turnover sensitive to the performance of the world's major economies such as the United States and Europe, which are struggling with crippling debt crises.
"We think the global economy, especially in Europe and America, will turn weak," said Jonathan Lu, chief executive of Alibaba.com.
The company said revenue from its China Gold Supplier package was up 20 percent at 921.19 million yuan ($144 million) in the quarter, contributing 56 percent to total revenues, according to its statement to the Hong Kong Stock exchange.
However, the number of paying members fell 2.1 percent from the previous quarter to 832,469. The company's China Gold Supplier saw subscriber numbers fall 3.7 percent, while its Global Gold Supplier package registered a subscriber decline of 3.2 percent, as Alibaba.com tried to control the quality of subscribers.
"If you look at their growth rate next year, it will probably slow down as well," said Dick Wei, an analyst at JPMorgan in Hong Kong. "I think the negative outlook of the macro economy will also affect them as well."
Net profit in April to June jumped to 464.55 million yuan from 362.96 million yuan a year earlier. That beat the average forecast of 420.4 million yuan from five analysts surveyed by Thomson Reuters I/B/E/S.
Revenue grew 19 percent to 1.62 billion yuan. Revenue from its international marketplace rose 20 percent to 948.97 million yuan.
Late last month, Alibaba Group struck a deal with Yahoo Inc and Softbank Corp over a transfer of the Chinese e-payments unit Alipay to group founder and chief executive Jack Ma.
Share price of Alibaba.com was up 2.69 percent before the results. They have lost about 35 percent this year, underperforming the Hang Seng Index, which is down 15 percent.
Reuters
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