Alibaba 3Q net income jumps on strong holiday season

Alibaba Group Holding Ltd (NYSE:BABA) announced its third-quarter fiscal year 2016 (3QFY16) earnings in the pre-market hours today.

Alibaba shares were up 3.25% in premarket trading on Thursday.

There has been vast article of pessimism written over the past few years regarding Chinese economic slowdown.

Alibaba, which has a hand in selling many of those products, generated record revenue of 91.2 billion yuan during its annual November 11 promotion known as Singles’ Day – a 60 per cent increase from a year earlier.

Annual active buyers rose 22 percent to 407 million.

The retail giant appears to face increasingly stiff competition from rival JD.com, which like Alibaba has worked to boost sales from foreign retail companies in China. It operates Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a group buying marketplace; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; and AliExpress, a consumer marketplace.

Gross merchandise volume (GMV) transacted on Alibaba’s China retail marketplaces rose 23 percent year-over-year to RMB964 million ($149 million), while mobile transactions accounted for 68 percent of total GMV. Excluding certain one-time items, Alibaba earned 99 cents a share.

Revenue for the quarter was RMB34.54 billion or US$5.33 billion, an increase of 32% compared to RMB26.18 billion in the same quarter of 2014. The consensus estimates from Thomson Reuters call for $5.81 in earnings per share (EPS) on $33.26 billion in revenue. The institutional investor owned 321,680 shares of the company’s stock after buying an additional 6,150 shares during the period. The company posted Earnings per Share of $0.76 on revenue of $5.3 Billion.

“Alibaba is on track to gain more shoppers in rural areas and smaller cities in China”, said Mr Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. 5,231,478 shares of the company traded hands.

Our cloud computing and Internet infrastructure business continued its rapid expansion, with revenue increasing 126% year-over-year to RMB819 million (US$126 million).

“These are pretty strong results”, said Henry Guo, a senior research analyst with Summit Research Partners LLC in NY.

Koubei, the online-to-offline marketplace that Alibaba and its subsidiary Ant Financial plowed nearly $1 billion into last summer, made 15.8 billion RMB ($2.4 billion) during the quarter.

“Based on the company’s large market share and user base, we can still see strong momentum in the company”.