Chinese tech giant Alibaba Group reported better-than-expected earnings for its latest quarter, signaling a strong rebound in its various businesses following the months-long economic slump caused by the coronavirus pandemic. The company's performance for its quarter ended in June revived confidence in its ability to generate profits despite the looming threat of a U.S. ban.
For its latest quarter, Alibaba reported a 34 percent year-on-year jump in its revenues, which hit 153.6 billion yuan, or roughly $21.7 billion, for the period. The figure was significantly higher than the average analyst expectation of 147.77 billion yuan for the quarter. Profits for the quarter, which hit 47.59 billion yuan, were also significantly higher than the 36.04 billion yuan analysts had expected.
Alibaba's chief financial officer, Maggie Wu, mentioned in a statement published together with the company's financial results that its domestic core businesses have fully recovered from the slump during the height of the pandemic earlier in the year. The positive statements from the company have managed to relieve investor concerns over Alibaba's future prospects, particularly as its business faces potential restrictions in the United States.
U.S. President Donald Trump had expressed his intention to step up the country's campaign to bar the use of Chinese technologies and deprive China of U.S. assets. Trump has hinted that he intends to impose sanctions and restrictions on more Chinese firms, targeting major tech companies.
Earlier in the month, Trump called on U.S. companies to cut ties with their Chinese suppliers and partners. This included a call for the discontinued use of Chinese cloud services such as those provided by Alibaba. The call came after the Trump administration threatened to ban ByteDance's TikTok app from the country if it did not immediately find a U.S. buyer.
Alibaba's chief executive officer, Daniel Zhang, said in the company's earnings call on Thursday that the U.S. is wrong to look at Alibaba as a threat. He clarified that Alibaba is actually a facilitator of U.S. economic growth and it fully supports the development of the country's businesses. Zhang noted that the company's vision is fully in line with businesses not just in China but also in the United States and the rest of the world.
Apart from the United States, Alibaba is also facing politically related pressures in India. The country's UC Browser was recently included in a list of 59 Chinese apps that were banned in the country on national security grounds.
