ANT Group’s quarterly earnings fell 19 per cent as the Chinese fintech pioneer founded by Jack Ma struggles to find new drivers of growth following regulatory clampdowns at home.
The Hangzhou-based company contributed 2.57 billion yuan (S$481 million) of profit to Alibaba Group Holding. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 7.7 billion yuan in profit for the December quarter, according to Bloomberg calculations based on the listed company’s disclosures.
That fall narrowed compared with a 92 per cent plunge in earnings for the previous three months, when Ant was hit by an investment loss. Its earnings lag a quarter behind Alibaba’s.
A representative for Ant declined to comment.
Ant has been expanding its overseas operations to overcome slowing growth at home. It’s tied up with at least 25 e-wallet platforms for cross-border payments in regions including South-east Asia and Europe. The company made broad overhauls to its business in March, setting up independent boards for international, database and digital technologies units, paving the way for future spinoffs.
The moves come after billionaire Ma gave up control of Ant last year. China wrapped up its crackdown on the once high-flying Internet sector by slapping more than US$1 billion in fines on Ant and Tencent Holdings in July.
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Ant also proposed to buy back as much as 7.6 per cent of its shares last year, giving investors such as Fidelity Investments and T Rowe Price Group an opportunity to sell some stock.
Under the repurchase plan, the valuation was trimmed to about US$79 billion – well off its peak of US$280 billion before regulators scrapped an initial public offering three years ago. The fintech company is awaiting a financial holding company licence, which would help revive the IPO.
Initially catering to Chinese tourists travelling outside the country, the company has expanded its services into a backbone for cross-border payments known as Alipay+ that can be used by different wallets. For example, when customers of GCash from the Philippines travel to South Korea, they can pay with GCash when they see the Alipay+ logo displayed at merchants.
Alipay+ connected more than 88 million merchants in 57 countries and regions as of early March.
Ant’s affiliate Alibaba saw revenue rise 6.6 per cent after it focused on gaining market share in e-commerce and cloud. BLOOMBERG
