Over 42 billion capitalization in 24 hours for Alibaba

by bold-lichterman

Chinese e-commerce giant Alibaba is on the rise. The company headed by Jack Ma has indeed presented revenue targets for the year 2018 that greatly exceed analysts’ estimates. It estimates that its revenues will increase by 45 to 49% for the 2018 financial year, where analysts were expecting an increase of 35% on average.

The markets reacted very positively to the announcement, with the company’s share value rising 13% in US markets and surpassing $ 142, a record since its inception. As a direct consequence of this phenomenon, the company’s market capitalization soars and increases mechanically by $ 42 billion, according to Bloomberg. This Friday, June 9 in the morning, Alibaba thus displays a market capitalization of 360.12 billion dollars. Its main competitor, Tencent, displays a market capitalization of $ 337.58 billion.

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Bloomberg data, as of June 9, 2017 10 a.m.

Diversification in cloud, the digital media and entertainment

This announcement follows the presentation of sharply rising results for its 2016 – 2017 financial year, which ended at the end of March. Alibaba announced that it had achieved a turnover of 22.9 billion dollars, up 56% from the previous year.

Selling products online, its historic activity, generated $ 19.45 billion in revenue, or 85% of the group’s total revenue. His activity of cloud computing, which accounts for 4% of the group’s overall turnover, has seen its income increase by 121% over the year. Finally, the branch digital media and entertainment, which currently generates 9% of group revenue, grew 271% over the year.

Despite Alibaba’s ambitious growth prospects for 2018, analysts remain concerned about the company’s ability to maintain such growth, amid a slowing Chinese economy. In addition, Alibaba faces increased competition from its main competitor, Tencent, which has also opted for a strategy of diversifying its activities.

Read also: Alibaba acquires Intimate Retail malls for $ 2.6 billion

Photo credit: Alibaba