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Asia Today ISSN 1861-4604 Friday, July 21, 2017

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Alibaba Group becomes the most valuable Asian company as market value soars to $360 billion

The e-commerce platform

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BEIJING, China - The world’s largest online shopping platform, Alibaba Group Holding defied analyst estimates on Thursday, as its market value soared to $360 billion on bullish sales forecast.> BNN
 
The e-commerce platform operator’s fiscal 2018 sales may increase by up to 49 percent, 10 percentage points higher than estimates.
Alibaba’s became the most valuable Asian company, surpassing its nearest rival by more than 8 percent.
 
The company’s shares jumped 13.3 percent overnight to a record $142.30 on the New York bourse.
 
This boosted the company’s market capitalisation to $360 billion, 8.4 percent more than Tencent Holdings as the most valuable Asian company.
The company’s digital advertising continues to grow while new ventures into cloud computing and digital entertainment are seen to be paying off.
The Hangzhou-based company, owner of the South China Morning Post said in a statement that revenue will increase by between 45 percent and 49 percent in the year ending March 2018. 
 
New Street Research’s analyst Kirk Boodry, who was expecting a 40 percent growth said, “The revenue guidance was a positive surprise. 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.”
 
Alibaba’s Taobao and Tmall sites, that were founded by former English teacher Jack Ma Yun in 1999 are the go-to platforms for China’s 448 million online shoppers.
 
This has taken the company’s gross merchandise volume up to $547 billion for the year ended March 31. 
 
Sales for the company’s fiscal 2017 rose 56 percent to a record 158.27 billion yuan ($23.29 billion).
 
Maggie Wu, chief financial officer said during Alibaba’s annual investor event in Hangzhou, “Despite having a larger base, we continue to accelerate our revenue growth.”
She further added that the revenue projection “is going to be voted by the feet of the merchants and consumers, and we have the confidence that based on the data and technology we have, we are going to achieve that.”
 
Experts added that Alibaba’s forecast is easing any concern that China’s slowing economy could weigh on online sales. 
 
Wu meanwhile added that revenue growth and the increase of Alibaba’s retail transaction volume are “decoupling.”
 
Hou Xiaotian , who has a “buy” recommendation on the stock said that Alibaba’s accelerated growth reflects the “winner takes all” trend in the global technology industry.
 
Adding, “With Alibaba’s advantage in data and technology, it’s in a much better position in finding the next big thing and seizing new opportunities than any other smaller company.”

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