Yahoo Finance Jack Ma’s Ant Ekes Out Profit Rise as Fintech Overhaul Advances
(Bloomberg) -- Billionaire Jack Ma’s Ant Group Co. saw profit inch up in the three months to December, despite setbacks from regulatory overhauls taming the country’s fintech industry.
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The Hangzhou-based company contributed 7.28 billion yuan ($1.1 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 22.05 billion yuan in profit for Ant’s December quarter, or a 1.3% increase from a year earlier. Ant’s earnings lag a quarter behind Alibaba’s.
Ant in March declared a dividend of about 3.9 billion yuan to its backers. But shareholders -- including scores of employees -- of two entities that held 50.52% of Ant pledged to keep the dividend within the firms to “better support the company as it moves forward with its business rectification and facilitate its long term sustainable development,” a company spokesperson said in an e-mailed response.
Jack Ma controls voting rights in Ant.
China kicked off a campaign to rein in its tech giants after snuffing out Ant’s $35 billion initial public offering in late 2020. The crackdown has snowballed into an assault on every corner of China’s technosphere as Beijing seeks to end the domination of a few heavyweights and create a more equitable distribution of wealth.
As part of the government-ordered restructuring, Ant has ramped up its capital base to 35 billion yuan. It is also building firewalls in an ecosystem that once allowed it to direct traffic from Alipay, with a billion users, to services like wealth management, consumer lending and delivery.
Consumer loans jointly made with banks have been split from Ant’s Jiebei and Huabei brands. Assets under management at its money-market fund Yu’ebao -- once the world’s largest -- dropped 15% from a year earlier to 825 billion yuan as of March.
Alibaba reported a better-than-expected 9% rise in revenue after Chinese consumers turned to online malls for basic needs during Covid lockdowns across the country. The company refrained from offering a projection for annual revenue, citing uncertainty arising from Covid curbs.
(Updates with company comment in third paragraph)
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