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Alibaba revenue soars ahead of IPO

Published 27/08/2014, 22:24
© Reuters People play in a hall inside Alibaba's headquarters in Hangzhou

By Abhirup Roy

(Reuters) - China's Alibaba Group Holding Ltd [IPO-BABA.N], which is expected to go public in New York as early as next month, reported a 46 percent jump in quarterly revenue as growth in the world's largest e-commerce market shows no signs of slowing.

Alibaba accounts for about 80 percent of all online retail sales in China, where rising internet usage and an expanding middle-class helped the company generate gross merchandise volume of $296 billion (178.6 billion pounds) in the 12 months ended June 30.

Alibaba had 279 million active buyers at the end of June, up 50 percent from a year earlier.

The company said the average active buyer placed 52 orders in the year ended June, up from 45 in the previous year.

Alibaba's monthly mobile users grew to 188 million, from 163 million in the three months ended March 31 and 136 million as of Dec. 31.

"Our current focus is on increasing mobile (gross merchandise volume) and user engagement," Alibaba said in a U.S. regulatory filing on Wednesday.

Smartphone shipments in China reached 351 million in 2013 and will exceed 435 million in 2014, according to projections by research firm IDC.

With people increasingly accessing the Internet from smartphones and tablets, online companies ranging from social networks such as Facebook Inc to e-commerce companies such as Amazon.com Inc have been investing heavily to develop their mobile platforms.

Alibaba said on Wednesday it had incurred "substantial indebtedness", after fully drawing down an $8 billion credit facility. The company has arranged another credit line of $3 billion.

"The main positive I take away is that (it) seems the mobile monetization is on a very strong upwards trajectory," Atlantic Equities analyst James Cordwell told Reuters.

Alibaba's initial public offering, which could top $16 billion to become the largest-ever technology IPO, is expected after the company starts an investor roadshow next week.

Analysts have said the company may be worth $200 billion or more when it goes public, which would make it one of the top 20 companies listed in the United States.

"The results are very positive overall for the forthcoming IPO and I think you can see valuations to head north of $200 billion as we go through the IPO process," Cordwell said.

Revenue from Alibaba's China e-commerce business increased about 46 percent to $2.15 billion, accounting for most of the total revenue of $2.54 billion in the first quarter ended June.

Online retail sales in China are expected to reach $420 billion to $650 billion by 2020, as much as the United States, Japan, the United Kingdom, Germany and France combined, according to a recent analysis by McKinsey Global Institute.

Net income attributable to Alibaba's ordinary shareholders nearly tripled to $1.99 billion, or 84 cents per share, in the quarter.

The company said Chairman Jack Ma owned 8.8 percent of the company's ordinary shares and Japan's Softbank Corp 34.1 percent at the end of the quarter.

© Reuters. People play in a hall inside Alibaba's headquarters in Hangzhou

Shares of Yahoo Inc, which owns 22.4 percent of the company, were up 0.5 percent at $37.99 in early trading on the Nasdaq.

(Additional reporting by Tanya Agrawal in Bangalore; Editing by Joyjeet Das)

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