HONG KONG • Alibaba Group Holding's quarterly earnings beat expectations after an expansion into new areas like cloud computing, a rare bright spot as many Chinese companies fell short of financial estimates.
The e-commerce giant's results came after a stunning day for China when at least 20 companies warned investors that full-year earnings would lag behind expectations.
They stemmed in part from a US$3.3 billion (S$4.4 billion) accounting gain after revaluing a subsidiary, and executives warned of uncertainty during a deceleration of the world's second-largest economy.
China is showing signs of further deterioration, hurting the consumer demand that Alibaba's e-commerce businesses rely on.
Still, it has been spearheading a drive into lucrative new spheres such as rural markets, cloud services and entertainment.
On Wednesday, Alibaba's chief executive officer Daniel Zhang told analysts those new initiatives as well as a global expansion should help offset the impact of an economic slowdown.
"China's economy is facing some uncertainty, but we do see opportunities," he told analysts during a conference call.
"One of the key regions we will stay focused on in the near term is South-east Asia."
Alibaba's shares rose 6.3 per cent in US trading to their highest level since September.
They have slumped 16 per cent in the past 12 months but have rallied so far this month.
Net income at China's biggest e-commerce company rose 37 per cent to 33.1 billion yuan (S$6.6 billion) in the December quarter, outpacing the 22.1 billion yuan projected.
It booked a gain of 21.99 billion yuan after re-valuing on-demand services arm Koubei.
The share of losses from the numerous companies it has invested in also narrowed sharply.
Adjusted earnings per share was 12.2 yuan, compared with the 11.2 yuan projected.
While revenue rose 41 per cent to 117.3 billion yuan, that was the slowest pace in more than two years and lagged behind the 119.4 billion-yuan projected.
Alibaba is bracing itself for more nervous consumers this year: In November, it trimmed its sales outlook by as much as 6 per cent.
Cloud revenue rose 84 per cent in the December quarter, helping the company command half the domestic market for Internet-based computing services.
Growth also sprang from a decision to take control of delivery network Cainiao, meals-on-demand service Ele.me and video platform Youku.
Those expansions, however, have moved the company away from an asset-light model.
Alibaba could tap new revenue spigots this year such as personalised feed recommendations, which now generate more traffic than traditional search on its e-commerce platforms.