Jack Ma’s Ant Group manages to boost profits despite regulatory crackdown

Bloomberg — Billionaire Jack Ma’s Ant Group Co. posted a gradual increase in profit in the three-month period ending in December, despite setbacks from regulatory tightening around China’s fintech industry.

The Hangzhou-based company contributed 7.28 billion yuan ($1.1 billion) to the profits of Alibaba Group Holding Ltd. (SLIME), according to a statement Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated profit of 22.05 billion yuan for Ant’s December quarter, or an increase of 1.3% over the previous year. Ant’s results lag a quarter behind Alibaba’s.

In March, Ant declared a dividend of about 3.9 billion yuan. But the shareholders, including dozens of employees, of two entities that owned 50.52% of Ant, decided to keep the dividend within the companies to “better support the company as it moves forward in rectifying its business, and to facilitate its long-term sustainable development,” a company spokesperson said in an emailed response.

Jack Ma controls the voting rights in Ant.

China launched a campaign to rein in its tech giants after scrapping Ant’s $35 billion initial public offering (IPO) in late 2020. The offensive has intensified, turning into an attack on every corner of China’s technosphere. while Beijing seeks to end the dominance of a few heavyweights and create a more equitable distribution of wealth.

As part of the restructuring ordered by the Government, Ant increased 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 1 billion users, to services such as wealth management, consumer credit and delivery.

Consumer loans made jointly with banks have been spun off from Ant’s Jiebei and Huabei brands. Assets under management in its Yu’ebao money market fund (once the world’s largest) fell 15% from a year earlier to 825 billion yuan as of March.

Alibaba reported a 9% rise in revenue, more than expected, after Chinese consumers turned to online shopping malls to meet their basic needs during the Covid-19 lockdowns across the country. The company decided not to present an annual revenue projection, citing uncertainty stemming from Covid-19 restrictions.

-With the assistance of Mayumi Negishi.

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Jack Ma’s Ant Group manages to boost profits despite regulatory crackdown