(Corrects reporting periods in first paragraph and throughout)
By Abhirup Roy and Alexei Oreskovic
Aug 27 Alibaba Group Holding Ltd's
revenue accelerated in the April-to-June quarter on strong gains
in its mobile business, providing investors with what may be the
final glimpse of the Chinese e-commerce company's financials
before its expected landmark market debut.
Alibaba, whose IPO could be the largest ever by a technology
company, said mobile revenue was roughly a third of its total
transaction volume in the three months ended June 30, up from
27.4 percent in the first three months of the year.
Revenue in the June quarter increased 46 percent
year-on-year to $2.54 billion, a faster pace than the 38.7
percent revenue growth that Alibaba posted in the previous
Net income attributable to Alibaba's ordinary shareholders
nearly tripled to $1.99 billion, or 84 cents per share, in the
"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.
"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.
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 in the 12 months ended June 30.
With people increasingly accessing the Internet from
smartphones and tablets, online companies ranging from social
networks such as Facebook Inc to e-commerce companies
like Amazon.com Inc have been investing heavily to
develop their mobile platforms.
"Our current focus is on increasing mobile (gross
merchandise volume) and user engagement," Alibaba said in a
U.S. regulatory filing on Wednesday.
Alibaba, expected by some to price its IPO as early as next
week, will have a roadshow next month that is likely to attract
interest from a wide range of funds, including those focused on
emerging markets and technology. Alibaba may garner a valuation
of $200 billion or more when it goes public, analysts say, which
would make it one of the 20 biggest companies listed in U.S.
markets and more valuable than Amazon.com Inc or eBay Inc
Though Alibaba's growth has slowed sharply over the past two
years as the Chinese leviathan accumulates scale, its revenue
growth still outpaces Amazon's. The U.S. online retailer
reported a 23 percent jump in June-quarter revenue to $19.34
billion, just about half of Alibaba's pace of expansion.
Some fund managers advocate selling out of Amazon, and
buying into Alibaba as a play on Chinese consumer spending
growth instead. [ID: nL1N0QW1PF]
"We've been waiting for this deal for so long that when it
finally arrives people will have been analyzing it for a year.
They're ready to buy," said Paul Meeks, senior analyst and
portfolio manager of the Sextant Growth Fund at Saturna Capital
in Bellingham, Washington.
"With an IPO that is this marquee, this large and this hot,
unless bankers price it at a crazy high level I'm not sure
there's any worry about people having to clear things out," he
said earlier this month.
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 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
Even as Alibaba prepares for its IPO it has continued to
invest more than $5 billion in acquisitions since the beginning
of the year, including Web browser maker UCWeb and mobile
mapping service AutoNavi Holdings Ltd. The number of
subsidiaries and consolidated entities has jumped to 279 from
202 from March to June, according to the updated prospectus.
Shares of Yahoo Inc, which owns 22.4 percent of the
company, closed up 1 percent at $38.18 on the Nasdaq.
(Additional reporting by Tanya Agrawal in Bangalore; Editing by
Joyjeet Das, Bernard Orr)