Revenue at Alibaba's cloud computing business nearly doubled to 4.7 billion yuan. Photo: Reuters

BEIJING – Alibaba Group Holding topped first-quarter revenue estimates on Thursday, driven by growth in its core e-commerce business.

Alibaba’s US-listed shares rose about 3 percent in premarket trade.

The company’s revenue rose 61 percent to 80.9 billion yuan (R168bn) in the April-to-June period, compared with the average analyst estimate of 80.7 billion yuan, according to Thomson Reuters.

Net income attributable to shareholders, however, fell 41 percent to 8.7 billion yuan, or 3.3 yuan a share, due to one-off costs related to share-based compensation for Ant Financials’ recent fundraising.

While revenue growth has accelerated since Alibaba’s 2014 stock exchange listing, aggressive investment in offline retail, logistics and cloud computing has squeezed profit margins.

Excluding items, the company earned 8.04 yuan per share, or $1.22 (R17.41) a share, missing the average estimate of 8.15 yuan a share.

Sales at Alibaba's core e-commerce business rose 61 percent to 69.2 billion yuan, compared with a 58 percent rise the same quarter a year earlier.

Revenue at its cloud computing business nearly doubled to 4.7 billion yuan, while entertainment unit revenue rose 46.4 percent to 6 billion yuan.

Alibaba also said it formed a holding company for online food delivery service Ele.me and e-commerce platform Koubei, for which it received over $3bn in new investment commitments, including from Alibaba and SoftBank, the company said.

Alibaba’s core businesses include online marketplaces Tmall and Taobao and payment platform Alipay. Like most Chinese e-commerce firms, revenue is typically higher in April-to-June versus three months prior due to a mid-year sale which peaks on “lucky date” June 18.

However, analysts said sales were likely lower this year due to public holidays during the event.

– REUTERS