China’s Ant Group Reports 39% Rise in Profits on Investment Gains
The company contributed 6.5 billion yuan ($1 billion) to Alibaba Group Holding Ltd.’s earnings, a filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 19.71 billion yuan in profit, up 39% from a year earlier. Ant’s earnings lag one quarter behind Alibaba’s. Ant declined to comment.
“The year-over-year increase in share of profit of Ant Group was mainly due to an increase in net gains arising from fair value changes in the investments held by Ant Group,” Alibaba said in its statement.
Executives are grappling with how to carve the sprawling firm into separate ventures with state-backed partners, people familiar with the plans have said. While regulators led by the central bank have handed down broad guidelines, they’ve been short on details, leaving Ant to proceed by trial and error, the people have said.
In the wake of China’s yearlong crackdown on the tech industry, firms are seeking to turn the focus away from increasing sales and more toward sustainability and philanthropy — key pillars of President Xi Jinping’s drive to reshape China’s economy.
Ant’s $35 billion initial public offering was snuffed out by China just over a year ago, and optimism about a speedy revival of the plans has faded while lofty valuation estimates that once reached $300 billion have been cut by as much as two-thirds.
The overhaul of Ant runs deep. Its ubiquitous super-app Alipay, a one-stop shop for the financial needs of a billion users, is on the brink of being sliced up, while its treasure trove of consumer data is to be thrown open to rivals for a fee.
As part of the overhaul, Ant has ramped up its capital base to 35 billion yuan and is moving to build firewalls in an ecosystem that once allowed it to direct traffic from Alipay to services like wealth management, consumer lending and on-demand neighborhood services and delivery.
China kicked off a campaign to rein in its tech giants last year with curbs on fintech and an antitrust probe into Alibaba that culminated in a $2.8 billion fine. Since then, nearly all aspects of the internet sector have come under greater scrutiny.
The company’s affiliate Alibaba reported revenue of 200.69 billion yuan in its September quarter, just short of the 206.2 billion yuan average of estimates. It forecast 20% to 23% growth in fiscal 2022 revenue, below the 27% that analysts are projecting.
- Bird Flu Found in Wild Duck Could Endanger Poultry Industry
- Businesses, Labor Take Stock After Supreme Court Tosses Biden Covid-19 Rule
- Major Airlines Warn of ‘Catastrophic’ Aviation Crisis With Tomorrow’s 5G Deployment
- People Moves: Zurich North America Changes Leadership in Captives, Crop, Construction, Customer Office