Ant Group Co.’s quarterly profit rose 17.4%, marking a sign of improvement at a company emerging from more than two bruising years of a Chinese regulatory crackdown.
(Bloomberg) — Ant Group Co.’s quarterly profit rose 17.4%, marking a sign of improvement at a company emerging from more than two bruising years of a Chinese regulatory crackdown.
The Hangzhou-based company contributed nearly 4.4 billion yuan ($610 million) of profit to Alibaba Group Holding Ltd., a filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 13 billion yuan in profit for the fintech company’s March quarter. That compares with a 56% fall in profit in the previous quarter. Ant’s earnings lag a quarter behind Alibaba’s.
The company declined to comment in an emailed statement.
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A multi-year government crackdown on the tech sector is nearing an end after Beijing slapped more than $1 billion of fines on Ant and Tencent Holdings Ltd. in July. Ant awaits a financial holding company license, which would pave the way for a revival of an initial public offering.
The company’s valuation was trimmed to about $79 billion in a recent proposed share buyback, far below its peak of $280 billion before the scrapped IPO.
Billionaire Jack Ma, who has largely remained out of public sight in recent years, has said he will cede control of the company amid a broader retreat. He returned to China in March after a long period of staying overseas.
Ant last month proposed to buy back as much as 7.6% of its shares, giving investors a chance to reduce exposure to the company. Investors including Warburg Pincus, Canada Pension Plan Investment Board, Carlyle Group and GIC Pte are among the top foreign shareholders that aren’t participating in the buyback, Bloomberg News reported citing people familiar this week. Fidelity and T. Rowe Price Group Inc. have agreed to sell some shares.
Ant is also preparing to break off its international business, blockchain and database management services, people familiar with the matter have said. Its affiliate Alibaba has decided not to sell any of its one-third stake in Ant.
–With assistance from Adam Haigh.
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