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Alibaba - results beat expectations, despite China slowdown

Charlie Huggins | 29 January 2016 | A A A
Alibaba - results beat expectations, despite China slowdown

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Alibaba Group Holding Ltd ADS EACH REPR 8

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The Chinese online retailer reported third quarter results which exceeded analyst forecasts, despite China's economic slowdown. Total group revenue for the three months to the end of December was RMB 34,543 million (US$5,333 million), an increase of 32%. China retail marketplace revenue increased by 35%, with annual active buyers and monthly active users increasing by 5.4% and 13.6%, respectively.

Gross Merchandise Volume (the value of products sold on its retail platforms like Taobao and Tmall) increased by 23%, a slowdown from the 28% growth achieved in Q2. This was put down to macro-economic pressures and a warm winter, which led to weaker apparel sales.

Mobile revenue grew by 192%. Mobile GMV now accounts for 68% of total GMV.

Monetisation, which measures the amount of revenue as a percentage of total GMV, increased to 2.98% during the quarter, up from 2.70% a year ago. This was driven by gains in Mobile.

Alibaba's cloud computing and Internet infrastructure business continued its rapid expansion, with revenue increasing 126% to RMB819 million.

Daniel Zhang, Chief Executive Officer of Alibaba, commented:

"Alibaba Group had an outstanding quarter, reaching a milestone of over 400 million annual active buyers and continuing our unrivaled leadership in mobile. Our proven ability to deliver an unparalleled consumer experience and to help merchants attract, engage and retain buyers will drive future growth in our core business."

"We remain focused on our top strategic priorities, including global imports, rural expansion, increasing our footprint in first-tier Chinese cities and building a world-class cloud computing business."

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.