Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Wednesday, 25 January 2017

Alibaba and the fifty-four per cent increase

Open sesame

A folk tale of mystery and intrigue indeed, from Alibaba's quarterly for the December quarter of 2016.

There is a lot of conjecture about whether China's reported economic growth of +6.8 per cent is real or made up. 

It's often argued that the true rate of growth is much lower, but there is also some evidence that stimulus has gotten things moving again in 2016. 

In that context, a quick look through Chinese e-commerce group Alibaba's latest quarterly results for December 2016 is enlightening.

Being traded on the New York Stock Exchange (NYSE : BABA), the numbers should be somewhat less rubbery, if not exactly water-tight.

Summary financials

Year-on-year revenues for the 3-month period were up by a blistering 54 per cent to RMB53.2 billion (US$7.7 billion), with revenue for the "core commerce" or retail segment up by 45 per cent from the prior year to RMB46.6 billion (US$6.7 billion).

Source: Alibaba

The group now reportedly has half a billion mobile monthly active users. 

If SEC filings and summary financials aren't your thing - and who could blame you? - visualise instead a PowerPoint presentation featuring lots of charts like these and you'd have the general picture...

Source: Alibaba

The group reported strong growth in cloud computing operations, mobile revenues, digital media and online marketing services (more clicks!), plus growth within some recently consolidated acquisitions. 

The group reported an astonishing US$4.9 billion in free cash flow in the quarter (on a non-GAAP basis), sending the share price blazing through $101, up from below $61 during the early part of 2016.

These enormous figures imply that billions of dollars are available to invest in growth in engagement "globally at a record scale".