Investing.com–Stocks Ali Baba Health IT (HK:) rose sharply on Tuesday after the company reported a sharp jump in its annual profits thanks to improving margins and strong demand for healthcare services and pharmaceuticals on its platforms.
The company, which was acquired by e-commerce giant Alibaba Group (HK:) (NYSE:) in 2014, rose as much as 13.7% to HK3.55 – a two-month high. It was also the index's biggest gainer, rising 0.6%.
Alibaba Health's adjusted net profit for the year ending March 31, 2024, rose nearly 91% to 1.44 billion yuan ($200 million).
Revenue rose about 1% to 27.03 billion yuan, as sales appeared to stagnate after coronavirus-induced demand led to excellent sales growth over the past three years.
But Alibaba Health has benefited from improved profit margins, especially in online healthcare services, as well as pharmaceutical sales.
Merchants on the Tmall healthcare platform jumped 28% to more than 35,000 merchants, while average revenue per user rose 17% year-on-year.
Going forward, the company said 2024 is likely to be a challenging year on the macro front. But it also signaled plans to move more into the online health industry, especially in setting up cloud infrastructure for Chinese hospitals.
The company also said it will explore the application of artificial intelligence through “large speech models.”