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Companies

Alibaba 4Q net profit jumps over three-fold on year

Alibaba said the number of its active users in China reached 654 million.   © Reuters

HONG KONG (Nikkei Markets) -- Chinese e-commerce major Alibaba Group Holding on Wednesday said its fourth quarter net profit grew more than threefold as higher volume of paid clicks boosted revenue.

Net profit for the quarter ended March was 25.83 billion yuan ($3.75 billion) compared with 7.56 billion yuan a year ago, the company said in an exchange filing. Consolidation of Ele.me and higher revenue from cloud computing business also aided bottom line. Revenue jumped 51% to 93.50 billion yuan.

In its core China market, the Hangzhou-headquartered company added 18 million consumers in the latest quarter, taking the total number of active users to 654 million, it said. Revenue from its cloud computing business, where it competes with Amazon and Microsoft, jumped 76% helped by an increase in average spending per customer.

"Looking ahead to fiscal 2020, we expect revenue to be over 500 billion yuan, reflecting our confidence and positive momentum going forward," said Maggie Wu, chief financial officer of Alibaba Group.

For the full year ended March, net profit rose 37% to 87.60 billion yuan. Revenue rose 51% to 376.84 billion yuan.

The company is on track to achieve $1 trillion total gross merchandise volume target by fiscal year end 2020, it said.

Operating margin for the fourth quarter contracted to 9% from 15% year ago, it added.

Alibaba's margins have declined over the last few quarters as the company increased investments in brick-and-mortar ventures and rural e-commerce to win over new customers.

China's economy grew at a faster-than-expected 6.4% in the first quarter of 2019 from a year earlier, spurred by a policy stimulus by local authorities to boost consumer demand. The growth came after the economy last year expanded at its slowest rate in almost three decades against the backdrop of a trade war with the U.S.

The e-commerce major had in October disclosed plans to merge its food delivery services platform Ele.me with local services platform Koubei, consolidating its online services catering to consumer lifestyles.

-- Lopamudra Bhattacharya

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