At a low point last year Alibaba shareholders wondered what they had bought during the frenzy of the Chinese group’s 2014 New York listing. The shares were well beneath the flotation price. Any buyer’s remorse vanished on Thursday.
The online commerce group forecast revenue growth of as much as 49 per cent this coming year, reminding us of the vibrancy of China’s ecommerce market. Alibaba is flying. So are shares that rose 10 per cent in morning trading. Free cash flow is strong — and growing fast. Alibaba will likely be giving more of it to shareholders.
Jack Ma is the boss who overpromises and then overdelivers. At last June’s investor day, the Alibaba founder gave guidance on revenues for the year ahead for the first time. Not only did Alibaba later lift its 48 per cent forecast, it then beat even that figure with full-year results last month. That happy surprise fanned hopes of another sales blowout this year. The latest forecast was already 10 percentage points above what analysts had expected.