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Alibaba beats estimates as COVID-19 pandemic fuels online, cloud computing demand

Alibaba beats estimates as COVID-19 pandemic fuels online, cloud computing demand

FILE PHOTO: A logo of Alibaba Group is seen at the company's headquarters in Hangzhou, Zhejiang province, China. (Reuters/Aly Song)

HANGZHOU: China's Alibaba Group Holding beat quarterly revenue and profit estimates on Thursday (Aug 20), as its core commerce and cloud computing businesses benefited from the coronavirus-led shift to online shopping and working from home.

The company's US-listed shares inched up, adding to their 23 per cent gain this year.

The results come as US-listed Chinese companies face renewed heat and President Donald Trump has said he could exert pressure on more Chinese companies after he moved to ban TikTok, owned by China's ByteDance.

The White House has been piling pressure ahead of the presidential election in November and financial markets are watching for signs of whether it will lead to further tit-for-tat moves that could hit a global recovery.

READ: Trump says looking at pressuring other Chinese companies after Bytedance

Sales from Alibaba's core commerce business jumped 34 per cent to 133.32 billion yuan (US$19.27 billion) in the first quarter ended June.

"Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59 per cent year-over-year," Chief Financial Officer Maggie Wu said in a statement.

On Monday, JD.com beat analysts' estimates for quarterly sales, while Pinduoduo is expected to report second-quarter results on Friday.

Alibaba's net income attributable to ordinary shareholders rose to 47.59 billion yuan from 21.25 billion yuan.

Excluding items, the company earned 14.82 yuan per American depository share (ADS). Analysts had expected 13.78 yuan per ADS, according to IBES data from Refinitiv.

Total revenue rose about 34 per cent to 153.75 billion yuan, slower than the 42 per cent growth in the same quarter last year.

Analysts had expected revenue of 147.77 billion yuan.

Source: Reuters/lk

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