UPDATE 1-China's Alibaba says Q3 net profit up 49 pct
(Adds executive, analyst comments and details)
HONG KONG, Nov 11 (Reuters) - Top Chinese e-commerce firm Alibaba.com Ltd (1688.HK) said on Tuesday its third-quarter earnings growth slowed to 49 percent after it more than doubled its profit in the previous quarter, as a deteriorating global economy dampened consumer spending.
The firm -- in which U.S. Internet company Yahoo (YHOO.O) is a key investor -- has ample cash and plans to buy up to HK$2 billion ($258 million) of its own shares, which have lost more than three-fifths of their value since they were listed last November.
"We believe a buyback programme is appropriate at this time, and it demonstrates the directors' confidence in the fundamentals of our business," Chief Executive Officer David Wei said in a statement.
Alibaba, which operates an online site connecting importers and exporters of Chinese goods, has said domestic traders will make up an increasingly larger portion of total trading as exporters feel the pain of the global economic slowdown.
The company had more than 6 billion yuan ($879 million) of cash and bank deposits at the end of September and there has not been any sign that the global economic slowdown has affected business, Wei told a telephone conference.
Analysts expect the company to post lower profits in 2009 with no revenue growth. Among the 15 analysts polled by Reuters Estimates only two have given the company a buy rating.
It posted a net profit of 308.6 million yuan ($45.20 million) in the three months ended September, against 207.3 million yuan a year earlier.
But the growth was smaller than a 159 percent jump in the previous quarter, when earnings were boosted by interest income from its IPO, which ranked amonth Hong Kong's most popular ever.
The company said last week it would slash its top membership fee for exporters by 60 percent to attract more members.
While the global financial crisis is weighing on Alibaba, Beijing's $586 billion stimulus package announced at the weekend could be a boon as part of the package was aimed at increasing lending to China's small and medium manufacturers.
"Starting from 2010, Alibaba should benefit from a more sustainable model, delivering faster growth and higher margins," Citigroup said in a recent research report.
The stock ended up 0.21 percent at HK$4.8 on Tuesday, sharply lower than its initial public offering price of HK$13.50.
It has plummeted about 83 percent so far this year, underperforming the broader Hang Seng Index .HSI which has fallen 49.5 percent, amid concerns about its premium memberships and the outlook for the global economy. ($1=HK$7.748=6.827 yuan) (Reporting by Kirby Chien and Michael Wei, Editing by Jacqueline Wong)
