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Alibaba quarterly profits almost double to $1.55b

19 May 2017

Income tax expenses soared 149 percent to 4.6 billion yuan in the March quarter.

"Our revenue base is now more diversified", Chief Financial Officer Maggie Wu said, adding that Alibaba's cloud and entertainment sectors became "more meaningful growth drivers" during the quarter.

China's embrace of the smartphone in the past decade - as well as economic activities related to the internet - has turned Alibaba, Tencent Holdings and other Chinese technology companies into some of the largest enterprises in the industry.

Its CEO Daniel Zhang said: "Our core commerce segment continued its significant growth and strong cash flow at large scale, enabling our aggressive investment in cloud computing [and] digital media and entertainment to drive the digital transformation of the economy and high-quality consumption across China".

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Alibaba vice chairman Joseph Tsai told a conference call the company is seeking to capitalize on changes in the Chinese economy. "The distinction between online and offline retail is going away because of the mobile phone". Monetisation of its mobile commerce platforms outstripped that of desktop.

Alibaba said it had more than 870,000 customers for its cloud computing services at the end of March.

Alibaba reported a 505 million yuan operating loss from cloud computing in the first three months, despite an increasing number of paying customers from 765,000 to 874,000.

Full year revenue from digital media and entertainment increased 271 per cent year-over-year to US$2.14 billion.

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In October 2016, Alibaba invested in Hollywood director Steven Spielberg's production company Amblin Partners to produce, distribute and market films both in China and around the world. The increases were mainly driven by the robust revenue growth of its China commerce retail business and Alibaba Cloud, as well as the consolidation of recently acquired businesses Youku Tudou and Lazada, the company said. Initially, Alibaba shares fell as much as 5.6% to $114 in NY, the biggest intraday drop in nearly a year.

According to the South China Morning Post, which is also owned by Alibaba, Ma's wealth has been boosted by a solid rally in Alibaba's share price, which has been on an upward trend since beginning of 2017, soaring 37 per cent.

The firm also announced a two- year share repurchase programme of up to US$6 billion (S$8.4 billion).

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Alibaba quarterly profits almost double to $1.55b