Alibaba.com Ltd. (1688), the unit of China’s biggest e-commerce company that’s under a privatization offer, said first-quarter profit fell 25 percent as it sold fewer website subscriptions to exporters.
Net income declined to 339.2 million yuan (US$54 million), or 0.07 yuan (US$0.01) a share, from 452.5 million yuan (US$ 71.70 million), or 0.09 yuan, a year earlier, Alibaba.com said in a statement today. Revenue rose 3.7 percent to 1.59 billion yuan (around US$ 250 million).
Parent Alibaba Group Holding Ltd., controlled by billionaire Jack Ma, said in February it may offer as much as HK$19.6 billion ($2.5 billion) to buy out minority shareholders at Alibaba.com. The unit’s exports promotion business has weakened since February 2011, when it said it would tighten screening of vendors on its website after some buyers were defrauded.
“The company has been undergoing a business transformation,” Richard Ji, an analyst at Morgan Stanley, wrote in an April 20 report. “Alibaba.com has been under pressure due to its exposure to China’s export business.”
Alibaba.com was unchanged at HK$13.30 in Hong Kong trading today. In February, Alibaba Group said it will buy the Alibaba.com shares it doesn’t own at HK$13.50 (US$ 1.74) each.
Subscribers for Alibaba.com’s Gold Supplier program for Chinese exporters fell more than 11,000 last quarter to 87,544 the company said. In 2011, Alibaba lost more than 22,000 Gold Supplier members.
Alibaba.com is the unit of Hangzhou, east China-based Alibaba Group that is focused on business owners. The closely held parent company, 40 percent-owned by Yahoo! Inc. (YHOO), also operates online commerce businesses such as Taobao and Juhuasuan that are aimed at consumers.
The proposed buyout of Alibaba.com will allow the unit to reorganize its business for the long term, free from the “pressure of market expectations,” Alibaba Group said in February. A date for a meeting of Alibaba.com shareholders to approve the transaction hasn’t been set.
