HONG KONG/SHANGHAI (Reuters) - Top Chinese e-commerce firm Alibaba.com Ltd beat forecasts with a 340 percent jump in 2007 net profit, thanks to China’s buoyant economy, increasing Internet access and growth in the firm’s number of paying members.
Alibaba.com, in which U.S. Internet company Yahoo is a key investor, dominates China’s 3.9 billion yuan business to business market, holding a share of over 57 percent last year, according to local data firm iResearch.
Its shares had lost more than one-fifth of their value on Tuesday before it reported its results following a sell-off of Nasdaq-listed Chinese Internet companies.
Some investors said they were concerned about the prospects for companies with direct exposure to the U.S. economic slowdown.
“As a trading company, no matter if it’s online trade or just normal trade, your business will still be affected if there is a recession in the U.S. economy,” said a fund manager at a Shanghai-based Chinese-foreign fund management joint venture.
Chief Executive Officer David Wei brushed off those concerns at a press briefing in Hong Kong.
“We don’t see the slowdown in the U.S. economy having a major effect, as our customers are working on expanding our merchandising channels and diversifying our supply chain,” Wei told reporters.
He said the company continued to explore business opportunities in other Asian countries and was looking for potential joint venture partners in India.
An online business-to-business site, Alibaba connects companies looking to import and export Chinese goods and was founded in 1999 as a bulletin board for businesses to post trade leads.
In December, it re-launched its Japan Web site (www.alibaba.co.jp), and is preparing to form a joint venture with Softbank to operate it.
Alibaba reported a 2007 profit of 967.8 million yuan ($136.7 million) versus 219.94 million a year earlier.
The result beat Goldman Sachs’ forecast of 947 million yuan and Cazenove’s estimate of 889 million.
Alibaba’s registered users grew by 40 percent to 27.6 million and paying members rose 39 percent to more than 305,000 last year.
Registered users in Alibaba’s international marketplace grew by over 41 percent to 4.4 million in 2007. Almost a fifth of its registered international users are in the United States, followed by the European Union and India.
Alibaba doubled its offices across China to 30, including Hong Kong. It also opened its first European branch office in Geneva.
Revenue grew 59 percent to 2.16 billion yuan mainly due to an increase in paying members and a rise in average spending per paying member.
Revenue from Alibaba’s international marketplace reached 1.55 billion yuan, up 56 percent.
Alibaba’s stock had fallen by more than 44 percent this year through Monday, lagging a 24 percent fall in the benchmark Hang Seng Index.
Its shares closed down 21 percent on Tuesday at HK$12.20, below its initial public offering price of HK$13.50 last November.
($1 = HK$7.8)
Reporting by Vinicy Chan and Sophie Taylor; Editing by Jason Neely
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