Alibaba shares jump as net profit doubles on online shopping fervor

Alibaba shares jump as net profit doubles on online shopping fervor

ALIBABA Group said revenue in the second quarter surged 56 percent to US$7.4 billion amid strong growth in its online retailing platform and other business segments. This beat analysts' estimates of 47.7 billion RMB, according to Thomson Reuters.

Alibaba - one of the most valuable companies in Asia - is benefiting from more Chinese consumers buying an increasing proportion of everything from food to clothing to luxury items online.

Following the announcement, New York-listed Alibaba shares jumped more than 4% to $166.38 during the early morning trade on Thursday, pushing them about 90% higher compared to the beginning of 2017.

Chinese authorities have issued a warning to the country's top e-commerce platforms, including Alibaba Holding Group Ltd's (BABA.N), over the sale of illegal virtual private networks that allow users to skirt state censorship controls.

But Alibaba's biggest investments of late have been in brick-and-mortar retail.

Alibaba's core commerce business brought in the majority of revenue - 43 billion ($6.4 billion) - but its 58 percent annual growth was topped by its smaller business units. Paying customers for its cloud computing service increased from 874,000 to 1.01 million from the previous quarter. He pointed to the fact that the company has more than 500 million mobile users, more than $500 billion gross merchandise volume, "industry-leading" earnings before interest, taxes, depreciation and amortization (Ebitda) margin, and a "rapidly growing" cloud business. In June, Alibaba increased its stake in Singapore-based online mall Lazada Group to 83% from 51% with a $1 billion investment.

"We are excited about the future as we continue to innovate and drive synergies among the businesses throughout the Alibaba ecosystem", Zhang said.

Equity attributable to shareholders of the parent company amounted to 425.9 million yuan, up 11 per cent from the beginning of the year.

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