Alibaba Doubles Quarterly Net Profit to $1.92 Billion

Chinese e-commerce giant Alibaba reported profits of $1.92 billion for the three months to December 2015. That was up 109% on the same quarter last year.

In the quarter, revenue grew 32% year-over-year and China retail marketplace revenue grew 35%. Diluted earnings per share increased by 114% to US$0.76 per share. On a non-GAAP diluted basis EPS was up 27% at US$0.99.

Alibaba reported its figures before the start of share trading in New York on Thursday morning (Eastern time).

Earlier in the day media reported that Alibaba had agreed to sell its minority share stake in privately-owned online services company Meituan-Dianping for $900 million. The company made no mention of the deal in its financial statement.

“Alibaba Group had an outstanding quarter, reaching a milestone of over 400 million annual active buyers and continuing our unrivaled leadership in mobile,” said Daniel Zhang, CEO of Alibaba Group, in a  prepared statement.

On a conference call with investors, deputy chairman Joe Tsai said that the ongoing structural changes in the Chinese economy present two “secular changes” that benefit Alibaba. The shift from an investment led economy to one driven by consumption is more sustainable. Second, The shift from manufacturing to services also means more middle class jobs and consumption. “Consumers are increasingly shifting to the Internet for goods, services and entertainment,” said Tsai.

Gross merchandize volume, or the gross value of transactions on Alibaba’s China retail marketplaces — a key metric of the top line business watched by financial analysts — was RMB964 billion (US$149 billion), an increase of 23% year-over-year, with mobile GMV accounting for 68% of the total.

The company listed its shares on the New York Stock Exchange in September 2014 at $68 per ADR. They finished trading on Wednesday at $69.5 per ADR. Pre-market trading indicated a 3.6% jump to  $71.98.

Earnings in the quarter included an unspecified investment gain from the sale of some assets to Alibaba Pictures Group. APG has a separate share listing in Hong Kong and has not yet announced its results.

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