Jack Ma's Ant Group Posts $3.5 Billion Profit in Six Months Ahead of IPO
August 20 2020 - 12:33PM
Dow Jones News
By Stella Yifan Xie
HONG KONG -- Ant Group Co., the Chinese financial-technology
giant backed by billionaire Jack Ma, earned roughly $3.5 billion
over a recent six-month period, showing how lucrative the company's
business has been as it gears up for a blockbuster initial public
offering.
Financial results released Thursday by Alibaba Group Holding
Ltd., which owns a 33% stake in Ant, showed that the
soon-to-be-listed company posted a profit of about 9.2 billion yuan
($1.3 billion) in the three months to March, and around 15.5
billion yuan ($2.2 billion) in the quarter ended December 2019.
Ant owns Alipay, a highly popular mobile-payments network that
is used by more than 900 million people in China to spend money
online and in physical stores, pay bills, take public
transportation, and make big-ticket purchases. The company also
provides a range of financial services to millions of businesses in
the country. It supplies technology to financial institutions and
other organizations, and sells financial products including mutual
funds and insurance policies to scores of individuals.
The Hangzhou-based company, which was valued at $150 billion in
a private fundraising round in June 2018, said last month that it
is planning concurrent initial public offerings on stock exchanges
in Hong Kong and Shanghai. The combined offerings could be among
the largest in history, and would take place roughly six years
after Alibaba's own record-setting $25 billion IPO in New York.
Alibaba, which last year added a second listing in Hong Kong,
reports financial results using U.S. generally accepted accounting
principles, so its profit figures for Ant could differ from the
results that Ant will disclose in its coming listing
prospectus.
Ant is aiming for a market capitalization of more than $200
billion when it goes public, The Wall Street Journal previously
reported. That would make it more valuable than Goldman Sachs Group
Inc. and place it close to PayPal Inc., whose market capitalization
was recently above $220 billion following a big share-price run-up
this year.
The first quarter is usually a seasonally weaker period for Ant
as business activity slows down around the country's Chinese Lunar
New Year holiday.
The three months to March 2020 included weeks in which many
cities in China were under lockdowns to stop the spread of the
coronavirus across the country. During this period, many
restaurants and businesses were closed and people were largely
confined to their homes, and curbed spending as a result.
Still, Ant's first-quarter profit was more than 500% higher than
the same period a year ago, according to Alibaba's filings. The
companies didn't provide reasons for the year-over-year surge.
Write to Stella Yifan Xie at stella.xie@wsj.com
(END) Dow Jones Newswires
August 20, 2020 12:18 ET (16:18 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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