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Alibaba (NYSE:BABA) issued its first quarterly report since its mid-September IPO today. Its share price increased by 4.19% to 106.07 from yesterday’s close of 101.80. The financial statement was one of those that can be reported at the polar opposites of positive or negative, depending on which aspect one prefers to tout. Investors are still thinking positively.
The Ups & the Downs
Total revenue for the quarter ending 30 September came in at 16.83 billion RMB, the equivalent of $2.74 billion (£1.74 billion), a 49% increase over the same period in 2013. For the six-month period ending on the same date, total revenue was 32.6 billion RMB, the equivalent of $5.31 billion (£3.31 billion) increasing by within a percentage point of the three-month increase at 50%.
Some onlookers were troubled by the increase in sales and marketing expense for the quarter that nearly tripled from 657 million RMB to 1.75 billion, the equivalent of $285 million (£178.1 million).
General and administrative expenses also generated some concern, rising by about 250% to 1,749 RMB, equal to $319.0 million (£199.4 million).
Basic EPS also diminished significantly from 2.26 to 1.33 ($0.22; £0.1375). On a diluted basis, EPS fell from 2.13 to 1.24 ($0.20; £0.125).
The company’s revenue is accounted for in six distinct divisions.
- China retail accounted for 12.8 billion RMB ($2.1 billion; £1.31 billion)
- China wholesale (from 1688.com) contributed 790 million RMB ($129 million; £80.6 million)
- Ali Express is Alibaba’s international retail arm, accounting for 419 million RMB ($68 million; £42.5 million)
- Alibaba.com added 1.2 billion RMB ($195 million; £121.6 million)
- Cloud computing and internet infrastructure added another 285 million RMB ($47 million; £29.4 million)
- Micro loans rounded out the revenue with 1.4 billion RMB ($223 million; £139.4 million)
What about that share price?
In case you haven’t been paying attention, BABA closed at 106.07 today. That is a 56% increase over its IPO offering of $68.00 in September. It is also up a generous 21 point from its one-month low.
Before the IPO the world stood still and watched, almost as expecting some kind of IPO disaster (as though that has never happened before). Whether it was the size of the offering, the fact that it is an socioeconomic entity, or both hardly seems to matter. The company revenues continue to increase as does it market cap and share price. Yet, still, there remains a great crowd on onlookers predicting, as if they are actually hoping, that this whole Alibaba thing is going to come crashing down.
I don’t expect that Jack Ma is as nearly concerned. Bloomberg Markets magazine reported that he “enjoyed a bigger increase in his wealth this year than any other billionaire” on the planet. Since we are not aware of any other billionaires than those on this planet, I going to go out on a limb and say that Mr. Ma (as opposed to Mr. Mom) is happy with the way Alibaba is operating.
