Ant Group Co.’s profit drop accelerated in the three months ended in September, falling 83% after China’s regulatory crackdown and a decrease in valuation of overseas equity investments.
(Bloomberg) — Ant Group Co.’s profit drop accelerated in the three months ended in September, falling 83% after China’s regulatory crackdown and a decrease in valuation of overseas equity investments.
The Hangzhou-based company contributed 1 billion yuan ($145 million) 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 3 billion yuan of profit for Ant. That compares with a 63% fall in the previous quarter. Ant’s earnings lag a quarter behind Alibaba’s.
Ant also issued a dividend of 3.9 billion yuan and 10.5 billion yuan, respectively in March and December last year, according to Alibaba’s earnings report. The company declined to comment in an emailed statement.
More than two years after authorities torpedoed its listing, Ant is awaiting a green light to apply for a financial holding company license. The company’s valuation was trimmed by Fidelity Investments again to $63.8 billion as of November, far below its peak of $235 billion.
Billionaire Jack Ma, who has largely remained out of public sight, has said he will cede control of the company amid a broader retreat.
In signs of progress, regulators recently allowed the firm’s consumer lending affiliate to increase capital. The Communist Party chief of Hangzhou recently praised the company for following its leadership, marking a softening stance toward the firm that was once controlled by Ma.
Ant Chairman Eric Jing highlighted the support private companies are receiving from the government in a February state-media report. He stressed that “the country hasn’t changed its stance or level of support for the private economy,” and that the government expects platform operations to continue to create jobs and compete internationally.
In a filing in July, Alibaba reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to a percentage that doesn’t exceed 8.8%.
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