Haitong Securities: Alibaba.com 2010 Net Profit to Jump 50%
Netease Tech, 12/29/10
Chinese investment firm Haitong Securities has issued a new report in which it estimates that Chinese B2B e-commerce company Alibaba.com's (1688.HK) net income for 2010 will be up 50.3% YoY, and net income for 2012 will grow 64.7% YoY, with a compound annual growth rate (CAGR) above 50% for the 2010-2012 period.
According to the report, Alibaba.com currently has 120,000 international paying members and 630,000 domestic paying members, and revenue from value-added services has grown from 17% of total revenue in 2009 to 23% this year. Going forward, Alibaba plans to concentrate on high-volume SME clients and finding and developing value-added services. Haitong Securities is optimistic about the prospects of three value-added services becoming multi-million RMB revenue streams for Alibaba.com: pay for performance (P4P) advertising, commissions on online transactions, and online loans. The latter could become an 11-digit RMB business, while fractional commissions could generate billions.
However, Alibaba.com is also exposed to risk, states Haitong, as exporter membership growth slows and foreign trade conditions and protectionism could adversely affect the company. Other issues include Yahoo's stake in the company and Alibaba.com's relationship with Alibaba Group's other subsidiaries.
Keywords: users online advertising B2B e-commerce Internet profit revenue Alibaba.com P4P 1688.HK Alibaba Group VAS
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