Alibaba Shares Correct Further From Recent Highs

Alibaba Shares Lower on Thursday

Shares in Chinese E-commerce giant Alibaba are trading almost 2% lower pre-market on Thursday. Alibaba has had a broadly positive year with price breaking out to fresh all-time highs. However, as of writing, shares are trading a little off those recent highs.

The company announced this week that it is opening a pilot factory in Hangzhou, a city in Eastern China. The move is part of Alibaba’s “smart manufacturing” initiative. It reflects the continued expansion beyond Alibaba’s core E-commerce business and into other areas such as online retail supply.

In a statement issued to announce the new opening, the company said that the factory will be managed by an internal unit called Xunxi Digital Technology Company. The unit will mainly deal with clothing retailers.

“Smart Manufacturing”

“Smart manufacturing” is a term which Alibaba-watchers will be familiar with. In 2016, Alibaba founder Jack Ma outlined it as one of the key trends and business opportunities for the company to focus on.

Along with “smart manufacturing”, Ma also referenced “new retail”, “new technology”, “new finance” and “new energy” as other key focus points.

Solid Q2 Earnings Beat

Shares in Alibaba have been firmly higher over recent months following a solid Q2 earnings release. The Chinese company reported Q2 earnings per share of $2.49, beating estimates of a $2.00 reading. With revenues of $21 billion over the June quarter, Alibaba recorded a 34% increase on sales seen over the same period a year prior.

The breakdown of the data shows that a great deal of the increased revenue was due to a 59% boom in the group’s cloud computing business. This was driven by growth in both the company’s public and hybrid cloud businesses.

In terms of customer numbers, Alibaba recorded a 16 million increase from the prior quarter taking the number of annual active customers on the groups China retail marketplace up to 742 million.

The group’s net income figure of $6.573 billion is a 143% increase on the same period a year prior. This is primarily due to a net gain recorded from the increase in market prices of the group’s equity investments in publicly traded companies.

Alibaba Shares Sitting Above Key Support

Shares in Alibaba has seen plenty of volatility over recent weeks.

Following the move up to all-time highs around the 300 level at the start of September, shares have since fallen lower, only to run into demand at the 265.73 mark which has seen price bouncing back up to 278.14 last. This is just above the bullish trend line once again.

While 265.73 holds, focus remains on further upside in the near term.

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