Jack Ma’s Ant Incurs a 63% Profit Plunge Amid Overhaul
Ant Group Co. incurred a steeper profit decline in the three months ended in June, as the fintech giant molds itself to appease Chinese regulators.
The Hangzhou-based company contributed 2.4 billion yuan ($335 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 7.3 billion yuan of profit for Ant's June quarter, down 63% from a year earlier. Ant's earnings, which lag a quarter behind Alibaba's, were partly hurt by a drop in the value of its investments.
Representatives with Ant declined to comment.
The fintech business controlled by billionaire Jack Ma has been expanding in Southeast Asia while seeking to become a financial holding company at home. Ant has been restructuring its operations, including beefing up capital, curbing consumer lending and shuffling management.
Its consumer finance unit is raising 10.5 billion yuan in a scaled-down capital boost from investors after China Cinda Asset Management Co. unexpectedly backed out of its investment plan this year.
A subsidiary of Sunny Optical Technology Group Co. will take 1.1 billion yuan of Chongqing Ant Consumer Finance Co.'s capital, for a 6% stake. Jiangsu Yuyue Medical Equipment & Supply Co. plans to add 524 million yuan, taking a 4.99% stake. Ant Group will contribute 5.25 billion yuan to retain its 50% holding, while a group of other backers are also investing. The investment proposal is still pending regulatory approval.
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%.
To look for growth, Ant is leveraging the payments
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