Alibaba and Tencent Show Some Businesses Will Be Fine During the Coronavirus Meltdown
Even in the midst of a crisis, money continues to move -- somewhere. And while the economic fallout from the COVID-19 pandemic will likely be dealt with for some time, there are early signs that certain business models will be particularly resilient.
Investors can look to China, which took the initial brunt of the crisis in January and February 2020 and has been reporting a steady drop in new infections, for clues. And there's no better place to start than with tech giants Alibaba (NYSE: BABA) and Tencent (OTC: TCEHY). While debate rages as to how accurate the new infection rate actually is in China, business results are at least indicating that internet-based operations will fare just fine.
First, it's worth mentioning Alibaba and Tencent's earnings results from 2019. During the final quarter of the calendar year -- which includes China's massive Nov. 11 "Singles Day" shopping holiday -- Alibaba's total revenue increased 38% to RMB 161.5 billion ($23.2 billion). Both adjusted and unadjusted earnings per share increased 49%. While e-commerce and all the related segments (electronic payments, advertising, etc.) continued to lead the way higher, Alibaba's small cloud segment also notched 62% growth to $1.5 billion in sales.
Source Fool.com