Alibaba.com Year 2008 Results Announced - shares decrease almost 10%

HONG KONG, March 19, 2009 /PRNewswire-Asia via COMTEX/ ----Alibaba.com Limited (HKSE: 1688) (HK.1688), the world's leading business-to-business e-commerce company, today announced its financial results for the year ended December 31, 2008.

Full Year 2008 Highlights

Total revenue of RMB3.0 billion in 2008, an increase of 39% as compared to 2007. EPS (diluted) was up 31% year-on-year to 26.71 Hong Kong cents and net income (profit attributable to equity owners) was up 25% year- on-year to RMB1.2 billion. Excluding the non-recurring interest income from our initial public offering over-subscription proceeds in 2007, net income was up by 95%.

The number of registered users and online storefronts on Alibaba.com's marketplaces increased by 10.5 million and 1.7 million, respectively, as buyers and sellers around the world saw the benefits of e-commerce to reduce costs and improve efficiency, especially during difficult economic times. New members signed up to our international marketplace in record numbers, with registered users growing by 3.5 million during the year to 7.9 million, up 80% year-on-year. Over one million new members joined our international marketplace during each of the third and fourth quarters of 2008, representing the biggest quarterly increases since Alibaba.com was founded.

We added over 126,000 paying members to our marketplaces in 2008, which exceeded the growth we had in any previous year. We saw a record increase of 12,192 Gold Supplier members in the fourth quarter, driven by the November 2008 launch of our Gold Supplier Starter Pack and an upgrade of our existing Gold Supplier service. These gains were made despite China's export sector experiencing its first negative growth in seven years during the quarter.

Thanks to the strong execution of our entire team and the relatively more robust China economy, our China marketplace contributed 36% of total revenue in 2008, compared to 28% in 2007.

Key Operating Data

As of December 31, 2008, our combined marketplaces had 38.1 million registered users, an increase of 38% year-on-year. We had 7.9 million registered users on our international marketplace and 30.2 million registered users on our China marketplace. In the fourth quarter of 2008, we added one million registered users to our international marketplace and 1.4 million registered users to our China marketplace.

As of December 31, 2008, the total number of storefronts on our marketplaces had grown to 4.6 million, an increase of 56% compared to 2007. Of this total, we had 970,000 storefronts on our international marketplace and 3.6 million storefronts on our China marketplace.

The number of paying members of our combined marketplaces had risen to 432,031 at the end of 2008, an increase of 41% year-on-year.

Citigroup review

“The company expects operating margin to be lower in 2009 compared to 2008,” Citigroup Inc. analyst Jason Brueschke wrote in a report yesterday. He cut his recommendation on Alibaba stock to “sell” from “hold,” and lowered his estimate for the company’s full-year profit this year to 561 million yuan from 785 million yuan.

J.P. Morgan review

Dick Wei, J.P. Morgan analyst, kept his "underweight" rating on the stock unchanged, saying the company might see a “good margin leverage” coming out of the macro downturn. “However, with the timing of demand recovery still uncertain, we believe share price lacks support at current valuation," he added.

J.P. Morgan had already shown their concern over 2009 estimates. Full story is here JPMorgan predicts that Alibaba operating profit margin to fall to 31% in 2009

2009 will be Year of Investment - David Wei

David Wei, CEO of Alibaba.com, cautioned investors as he said, "The risk of a further contraction in Chinese exports and a sustained period of lackluster growth still exists. However, we continue to be confident in China's economy, in e-commerce, in our products and in our people. In fact, we see the current global economic crisis as a great opportunity to help our SME customers move online, expand our market leadership and invest for growth so we emerge even stronger in the future. 2009 will be a year of investment and expansion for Alibaba.com as we stay focused on our customers and our goal of building the world's largest online community of buyers and suppliers."