Chinese e-commerce giant Alibaba is expected to maintain its double-digit growth rates as it is scheduled to report its second quarter earnings before the opening of the biggest online shopping event of the year, the Singles' Day, on Wednesday, Nov. 11.
Analysts expect Alibaba's report to show 54 percent increase in revenue in local currency to $5 billion, with earnings per share minus items of 69 cents, up 29 percent year on year. The increase in revenue may be attributed to international growth and revenue in Alibaba's expanding digital media and entertainment market, an article published by investors.com said.
M Science, an investment firm, is optimistic about Alibaba's earnings in the fourth quarter, saying the company is "roughly in line with consensus".
According to the report, Alibaba's sales in the upcoming Nov. 11 Singles' Day event will boost its earnings for the third quarter. The company has outlined its strategy for the event which included three weeks of marketing promotions, entertainment and offerings for new products.
Alibaba made $14.3 billion sales transactions on various e-commerce sites during last year's Singles' Day, beating its own record of $9.3 billion from the previous year. The sales transaction gave the company nearly $357 million in revenue while about 710 million payment transactions were processed during the event.
Analysts are also confident that Alibaba will benefit from the expansion of China's five leading express delivery companies. The e-commerce giant's 50-day moving average dropped after getting support on Oct. 13 near 100.
Although no one can match the transaction and customer level of Alibaba on Singles' Day, the event has also benefited Alibaba competitors like JD.com, Tencent Holdings, Baidu and other China Internet companies.
Ahead of its earnings report, analysts believed that Alibaba's price-target will increase, based on revenue upside potential and an improving profit outlook. Alibaba's price target was elevated by Needham analyst Kerry Rice to 125 from 105.
Alibaba beat expectation when it reported its fiscal Q1 earnings on Aug. 11 at a time when mobile monthly active users surged 39 percent to 427 million. The company bought $2 billion worth of company shares during that quarter.