UPDATED: Chinese e-commerce and entertainment giant Alibaba announced a growth of 25% in non-GAAP net profits for the the three months to Dec 2014.

The giant group, which floated on the New York Stock Exchange in September, reports a financial year to end of March. Figures are for its third quarter.

Non-GAAP earnings per share of US$0.81 per share were up 13% and were ahead of analysts estimates, which had averaged US$0.75 per share.

However the market was unimpressed by the top-line, revenue growth, which disappointed. The shares closed the Thursday trading session down by $8.64 at $89.81.

“Alibaba performed very well this quarter, with revenue growing 40% year on year,” insisted Maggie Wu, chief financial officer of Alibaba Group. Revenue was $4.22 billion in the quarter.

Executive vice chairman Joe Tsai said that the company’s digital entertainment activities are an important part of the group. Growth is expected to come from the stake acquired in online video company Youku Tudou and from further deployment of Alibaba’s set top boxes.

“Content is also very important. We will be very disciplined to purchase unique content, and also to self-produce unique content,” said Tsai, speaking on a conference call.

The group has been embroiled in controversy over the past two days.

On Tuesday Yahoo announced that it would offload its shares in Alibaba into a special purpose vehicle in order to give U.S. investors a tax efficient way of benefitting from the stake. Alibaba has said that it had little notice of the proposal.

The same day, China’s State Administration for Industry and Commerce released a previously secret ‘white paper’ that accused Alibaba of not doing enough to supervise the merchants that use its sites to sell counterfeit goods. In an equally unusual move, Alibaba vigorously disagreed with the ministry’s findings. But the ministry hit back by saying that it had kept the report quiet since July last year in order not to impede Alibaba’s IPO preparations.

There are now suggestions that Alibaba could be open to a class action lawsuit in the U.S. if it could be shown to have failed to disclose material problems at the time of the share sale.

Tsai strongly rebutted the SAIC investigation and said that Alibaba intends to file a complaint. “The report is flawed and based on arbitrary methodology,” he said. He also noted that the SAIC has already removed the white paper from its website.

He explained that Alibaba has “zero tolerance” of counterfeits and IP infringement. He explained that it is working with regulators, copyright owners and over 1,000 brands and has recently hired 300 additional anti-piracy personnel.