Alibaba reports a 30% annualised growth in the second-quarter revenue

Written by: Wajeeh Khan
November 5, 2020
  • Alibaba reports a 30% annualised growth in the second-quarter revenue.
  • The e-commerce giant's net income slides to £3.33 billion in fiscal Q2.
  • Alibaba had 757 million annual active customers as of the end of Q2.

Alibaba Group Holding Ltd. (NYSE: BABA) said on Thursday that its profit in the fiscal second quarter came in better than expected as consumer spending improved in recent months after months of disruptions due to the Coronavirus pandemic.

At £227 per share, Alibaba is currently more than 35% up year to date in the stock market after recovering from a low of £135 per share. In comparison, shares of the company were trading at £168 per share at the start of the year.

Alibaba Group’s Q2 financial results versus analysts’ estimates

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In terms of revenue, Alibaba reported a 30% annualised growth in the second quarter to £17.94 billion. According to FactSet, experts had forecast a lower £17.91 billion of revenue for the e-commerce giant in Q2.

CFO Maggie Wu commented on the earnings report on Thursday and said:

“Our domestic core commerce business continued to grow steadily during the post-COVID-19 environment in China through higher purchase frequency and consumer spending.”

Total core commerce revenue, Alibaba said, also jumped in the recent quarter to £15.14 billion.

At £3.33 billion, the Chinese conglomerate’s net income in the second quarter was sharply lower than £8.39 billion in the same quarter last year. In the prior quarter (Q1), Alibaba had reported an over 100% year over year growth in its net income, as per the report published in late August.

Earnings per American depositary share (ADS) printed at £2.08 in Q2. FactSet Consensus for earnings per ADS stood at a lower £1.60.

Alibaba had 757 million annual active customers at the end of Q2

As of the end of the second quarter in September, Alibaba had 757 million annual active customers versus 693 million in the fiscal first quarter.  

In related news, Alibaba-affiliated fintech company, Ant Group, had its listing suspended as Chinese regulators raised last-minute concerns earlier this week. Otherwise, Ant Group was scheduled to start trading on Thursday.

Alibaba’s stake in the fintech giant stands at 33%. According to analyst Youssef Squali of Susquehanna, the suspension of Ant’s IPO has no direct impact on Alibaba’s operations.

The New York-listed shares of Alibaba performed fairly upbeat in the stock market last year with an annual gain of more than 55%. At the time of writing, the Chinese e-commerce giant is valued at £611.59 billion and has a price to earnings ratio of 29.97.