Shares of Alibaba Group Holding Limited (BABA, Financial), the largest e-commerce company in China, performed well in the third quarter following strong quarterly results. Alibaba’s core China retail commerce business grew revenues 49% – driven by the continued shift to mobile transactions and improvements in mobile monetization – and its cloud business (same as AWS) grew sales 156%. Enhanced financial disclosure helped investors to understand better the profitability of the core commerce business – which has over 60% operating margins – and thereby attribute a higher value to it. We expect that mobile monetization will continue to improve through 2016 and beyond, and that the company will continue to profit from investments in new areas such as online grocery and cloud computing. (Ashim Mehra)
From Baron Opportunity Fund third-quarter 2016 commentary.
