Rise in online shoppers boosts shares of Alibaba
Updated: 2009-07-21 07:39
(HK Edition)
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HONG KONG: Shares of Alibaba.com Ltd rose to the highest in more than a year in Hong Kong after a report said the number of online shoppers on the mainland gained 19 percent in the first six months of the year.
The operator of the country's biggest trading Web site climbed for a fifth trading day, rising 13.17 percent or HK$1.86 to close at HK$15.98 yesterday, the highest since early May 2008.
The nation's online shoppers increased to 87.9 million in the first half of 2009, Xinhua news agency said on July 17, citing the China Internet Network Information Center.
The mainland overtook the US as the Internet market with the most users last year as rising personal income helped boost demand for services such as e-mail and online shopping. Hangzhou-based Alibaba's shares have almost tripled this year after the company announced plans to expand outside the mainland, while local rival Tencent Holdings Ltd's stock has doubled.
"There will be plenty of upside for Internet companies in China, since the penetration rate is still low compared to the US," Dick Wei, an analyst at JPMorgan Securities Ltd, said by phone yesterday. "Internet users in China will continue to rise in coming years, and Alibaba's strategy to expand to overseas markets should also benefit the company."
Tencent, operator of the biggest online chat service on the mainland, rose 8.12 percent to end at HK$106.50 yesterday.
The Shenzhen-based company is the best-performing stock on the Hang Seng Index this year.
Alibaba may invest in an e-commerce venture in India to tap growth in the company's largest overseas market after the US, chief executive David Wei said last month.
"We grew 138 percent in India last year and it is now the largest supplier market after China," Wei said.
The Internet operator plans to spend $30 million this year to market its services overseas. Alibaba aims to derive one-third of its revenue from customers abroad in three to five years, from about 2 percent now, Wei said in May.
There were 338 million Web users on the mainland as of the end of June, compared with 298 million six months earlier, according to a report by the China Internet Network Information Center on July 16. Subscribers now account for more than 25 percent of the population, according to the government agency.
China Daily - Bloomberg News
(HK Edition 07/21/2009 page4)