KWEB - Alibaba leads rally in Chinese tech stocks after reporting strong Q1 sales

Alibaba ( NYSE: BABA ) shares rose on Thursday after the company posted first-quarter results that handily beat estimates, prompting a rally in Chinese tech stocks.

Alibaba ( BABA ) gained nearly 4.5% to $100.16 in premarket trading, while JD.com ( NASDAQ: JD ) and Pinduoduo ( NASDAQ: PDD ) both tacked on more than 4%.

Baidu ( NASDAQ: BIDU ), Bilibili ( BILI ) and Kingsoft Cloud Holdings ( KC ) saw more modest gains, ranging between 2 and 3%, while NetEase ( NTES ) bucked the trend and was lower.

The KraneShares CSI China Internet ETF ( KWEB ) also rose sharply, tacking on nearly 3%.

For the period ending June 30, Alibaba ( BABA ) said it earned an adjusted $1.75 per share on $30.69B in sales, as the company's China commerce segment declined 1% year-over-year.

Analysts were expecting Alibaba ( BABA ) to earn an adjusted $1.56 per share on $30.16B in sales.

Even though Chinese commerce did not experience much growth year-over-year, Alibaba ( BABA ) said the June 18 Shopping Festival saw positive gross merchandise volume year-over-year, with "especially strong purchasing demands" from the company's 88VIP members.

“Despite the challenges posed by the COVID-19 resurgence, we delivered stable revenue performance year-over-year," Toby Xu, Chief Financial Officer of Alibaba Group, said in a statement .

Xu added that Alibaba ( BABA ) has narrowed losses in its key businesses, citing ongoing improvements in operating efficiency and increasing focus on cost optimization.

Alibaba ( BABA ) also bought back 38.6M ADS for approximately $3.5B during the quarter. The company has approximately 2.6B ADS, the equivalent of 21.2B ordinary shares outstanding and has $12B left in its stock buyback program.

Late last month, Alibaba ( BABA ) said it was planning a listing in Hong Kong, with Alibaba Chief Executive Daniel Zhang calling it a "launch pad for Alibaba's globalization strategy."

The company will hold a conference call at 7:30 a.m. to discuss the results.

On Monday, Alibaba ( BABA ) said it would "strive" to keep its New York listing after the Securities and Exchange Commission said it may delist the company amid auditing concerns .

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