Investing.com-- Shares of Alibaba Health Information Technology (HK:0241) rose sharply on Tuesday after the firm clocked a sharp jump in its annual earnings on improved margins and strong demand for healthcare services and pharmaceuticals on its platforms.

The firm, which was acquired by e-commerce giant Alibaba Group (HK:9988) (NYSE:BABA) in 2014, rose as much as 13.7% to HK3.55- a two-month high. It was also the top gainer on the Hang Seng index, which rose 0.6%.

Alibaba Health’s adjusted net profit for the year to March 31, 2024, surged nearly 91% to 1.44 billion yuan ($200 million).

Revenue rose about 1% to 27.03 billion yuan, as sales appeared to be stagnating after COVID-led demand sparked stellar sales growth over the past three years.

But Alibaba Health benefited from improved margins, especially on its online healthcare services, as well as pharmaceutical sales.

Merchants on its Tmall Healthcare Platform jumped 28% to over 35,000 merchants, while average revenue per user surged 17% year-on-year.

Going forward, the firm said that 2024 was likely to be a challenging year on the macro front. But it also flagged plans to lean further into the internet health industry, particularly in setting up cloud infrastructure for Chinese hospitals.

The firm also said it will explore the application of artificial intelligence through “large speech models.”

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