Alibaba is Asia’s No. 1 company as market value soars to US$360 billion on bullish sales forecast
The world’s largest e-commerce platform operator said fiscal 2018 sales may increase by up to 49 per cent, 10 percentage points higher than estimates
Alibaba Group Holding is the most valuable Asian company, surpassing its nearest rival by more than 8 per cent, after its New York-traded stock soared to a record on the back of a bullish 2018 sales forecast that beat every analyst estimate.
Alibaba’s shares jumped 13.3 per cent overnight to a record US$142.30 on the New York bourse, boosting its market capitalisation to US$360 billion, 8.4 per cent more than Tencent Holdings as the most valuable Asian company.
The world’s largest online shopping platform defied every analyst estimate with an earnings forecast yesterday that topped average projections by 10 percentage points, as digital advertising grows while new ventures into cloud computing and digital entertainment begin to pay off.
Revenue will increase by between 45 per cent and 49 per cent in the year ending March 2018, said the Hangzhou-based company, owner of the South China Morning Post. That’s higher than the 35 per cent average estimate in Bloomberg’s poll of 43 analysts.
“The revenue guidance was a positive surprise,” said New Street Research’s analyst Kirk Boodry, who was expecting a 40 per cent growth, and has a “buy” recommendation on the stock. “The main driver is the power of their data analytics platform, as they can provide very detailed and accurate consumer targeting for advertisers, who are increasingly keen to spend money with Alibaba. ”
That’s helped the company chalk up US$547 billion in gross merchandise volume -- the value of goods sold through the platform -- for the year ended March 31, for which the operator charges a fee. The company’s fiscal 2017 sales rose 56 per cent to a record 158.27 billion yuan (US$23.29 billion).