by winston » Wed Aug 27, 2008 10:18 pm
Not vested.
Alibaba Profit More Than Doubles on More China Users By John Liu
Aug. 27 (Bloomberg) -- Alibaba.com Ltd., the owner of China's biggest trading Web site for companies, reported second- quarter profit more than doubled, beating estimates, after luring more Chinese businesses to use its services.
Net income rose to 396.5 million yuan ($58 million) from 153 million yuan a year earlier, the Hangzhou, east China-based company said today. That was 34 percent more than the highest of four analysts' estimates in a Bloomberg survey.
More Chinese companies began using Alibaba's Web site in a bid to boost sales of shoes, toys and other goods to domestic businesses, as economic slowdowns in the U.S. and Europe cooled demand for exports. Chinese retail sales rose the most in at least nine years last month as higher wages fueled consumer spending in the world's fastest-growing major economy, according to government data.
``Only a few of China's small and medium-sized businesses have started using the Web to sell products, which means there is still a lot of room for Alibaba to grow,'' Li Zhongzhi, an Internet analyst at Ping An Securities Co., said before the earnings release. Li, based in Shenzhen, southern China, recommends buying Alibaba shares.
Second-quarter earnings per share rose to 0.0784 yuan from 0.0318 yuan a year earlier, Alibaba said. Sales increased 43 percent to 735 million yuan.
Analyst Estimates
Alibaba was expected to post profit of 287.5 million yuan on sales of 734 million yuan, according to the median of four analysts' estimates.
The stock rose 0.5 percent to close at HK$9.30 in Hong Kong trading. The shares have declined 66 percent this year, compared with a 23 percent fall by the city's benchmark Hang Seng Index. The earnings were released after market hours.
The economic slowdown in the U.S. may make it ``tougher'' for Chinese exporters over the next six to 12 months, Chief Executive Officer David Wei said in a conference call today.
``Every company is remaining cautious in this uncertain and volatile market,'' Wei said.
Revenue from Alibaba's international Web site, which helps Chinese exporters sell goods to buyers in the U.S., Europe, and other countries, rose 34 percent in the first half, the company said. Sales for its domestic site, which assists companies win orders from local buyers, increased 85 percent.
China passed the U.S. to become the world's biggest Internet market with 253 million Web users at the end of June, according to the state-backed China Network Information Center, which licenses online domain names. The Asian nation may have 406 million Web users by 2010, more than the total population of the U.S., according to Credit Suisse estimates.
The company's parent, Alibaba Group Holding Ltd., is 39 percent owned by Yahoo! Inc., making the U.S. Web portal its biggest single shareholder. Softbank Corp., Japan's third-largest mobile-phone company, is the second-biggest shareholder with a 29 percent stake.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"