--- title: "Jack Ma-Backed Ant’s Profit Fell 65% Due to 7 Billion Yuan Fine" description: "Ant Group Co.’s quarterly profit fell by 65%, dented by a one-time fine that signaled the end of China’s yearslong crackdown on the tech industry." type: "NewsArticle" publisher: "Daily Maverick" site: "https://www.dailymaverick.co.za" section: "Newsdeck" author: "Bloomberg" author_url: "https://www.dailymaverick.co.za/author/bloomberg/" canonical_url: "https://www.dailymaverick.co.za/article/2023-11-16-jack-ma-backed-ants-profit-fell-65-due-to-7-billion-yuan-fine/" published: "2023-11-16T17:07:39" lang: "en-ZA" word_count: 595 --- # Jack Ma-Backed Ant’s Profit Fell 65% Due to 7 Billion Yuan Fine > Ant Group Co.’s quarterly profit fell by 65%, dented by a one-time fine that signaled the end of China’s yearslong crackdown on the tech industry. By Bloomberg · Published 16 November 2023, 19:07 SAST ## Key points - Despite a hefty fine from Beijing, Ant Group's profits have grown 17% since last quarter and the company has plans for an IPO, buyback, restructuring and AI language model. - Ant Group contributed 846 million yuan ($117 million) of profit to its affiliate Alibaba Group Holding Ltd. in the June quarter. - Beijing imposed a $1 billion fine on Ant and Tencent Holdings Ltd. in July. - Ant proposed to buy back as much as 7.6% of its shares in July, reducing its valuation to about $79 billion. - Ant is leveraging its payments network for collaborations with digital wallets around Asia and rolling out products powered by generative AI. ## Content The Hangzhou-based company contributed 846 million yuan ($117 million) of profit to its affiliate Alibaba Group Holding Ltd., a filing showed Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 2.6 billion yuan in profit for the fintech company’s June quarter. That compares with a [17% rise](https://www.bloomberg.com/news/articles/2023-08-10/jack-ma-backed-ant-s-profit-rises-17-in-first-signs-of-uplift) in Ant’s profit in the previous three months. Its earnings lag a quarter behind Alibaba’s. Ant’s profit would have grown to 9.6 billion yuan, excluding the 7 billion yuan fine in July. Ant declined to comment in an emailed statement. | Read more about Ant: | | --- | | [Carlyle, GIC Skip Ant’s Buyback After Valuation Slumps 70%](https://www.bloomberg.com/news/articles/2023-08-08/carlyle-gic-skip-ant-s-buyback-after-valuation-slumps-70) | | [Jack Ma-Backed Ant Plans Restructuring, Paving Way for HK IPO](https://www.bloomberg.com/news/articles/2023-07-26/jack-ma-backed-ant-plans-restructuring-paving-way-for-hk-ipo) | | [Alibaba to Stay on Sidelines of Ant’s $6 Billion Stock Buyback](https://www.bloomberg.com/news/articles/2023-07-24/alibaba-to-stay-on-sidelines-of-ant-s-6-billion-stock-buyback) | Beijing slapped more than $1 billion of fines on Ant and Tencent Holdings Ltd. in July, reining in its national champions that amass data on hundreds of millions of people. Ant is awaiting a financial holding company license, which would pave the way for a revival of an initial public offering. Ant proposed to buy back as much as 7.6% of its shares in July, giving investors a chance to reduce exposure to the firm. Under the repurchase plan, the company’s valuation was [trimmed](https://www.bloomberg.com/news/articles/2023-07-08/ant-plans-to-spend-about-78-5-billion-to-repurchase-shares) to about $79 billion, far below its peak of $280 billion before its IPO was scrapped three years ago. Investors including Warburg Pincus, Canada Pension Plan Investment Board, Carlyle Group and GIC Pte are among top foreign shareholders that aren’t participating in the buyback, Bloomberg [reported](https://www.bloomberg.com/news/articles/2023-08-08/carlyle-gic-skip-ant-s-buyback-after-valuation-slumps-70) in August. Fidelity and T. Rowe Price Group Inc. have agreed to sell some shares. Alibaba has decided not to sell any of its stake. Ant is also preparing to [break off](https://www.bloomberg.com/news/articles/2023-07-26/jack-ma-backed-ant-plans-restructuring-paving-way-for-hk-ipo) its international business, along with blockchain and database management services, people familiar with the matter have said. Billionaire Jack Ma, who has largely remained out of public sight in recent years, [ceded control](https://www.bloomberg.com/news/articles/2023-01-07/billionaire-jack-ma-gives-up-control-on-ant-group) of Ant earlier this year amid a broader retreat. ### Southeast Asia To look for growth, Ant is leveraging the payments network it built for Alipay to collaborate with digital wallets around Asia for transactions outside of their home markets. Initially catering to Chinese tourists traveling outside the country, the company has expanded the service into a backbone for cross-border payments known as [Alipay+](https://www.alipayplus.com/) that can be used by different wallets. For example, when customers of GCash from the Philippines travel to South Korea, they can pay with GCash when they see the Alipay+ logo displayed at merchants. Another budding source of revenue comes from Alipay+ [D-store](https://ds.alipayplus.com/), which allows businesses to build digital stores across platforms including Chope, AlipayHK and Touch ‘n Go. The company plans to generate income from servicing brands like Burger King that want an online presence in various apps. Ant’s Singapore digital wholesale bank also started [offering](https://www.bloomberg.com/news/articles/2022-11-03/ant-digital-bank-expands-in-singapore-with-small-business-loans) loans to small and medium-sized businesses in November 2022. ### Generative AI Ant [received approval](https://www.bloomberg.com/news/articles/2023-11-06/ant-receives-chinese-government-nod-to-roll-out-ai-services) from the Chinese government to roll out products powered by its large language model Bailing to the public in November. Chinese tech firms from Alibaba to Tencent Holdings Ltd. and Baidu Inc. have joined startups Baichuan and Zhipu to release ChatGPT-like products, joining a global race to capitalize on the potential of generative AI. Ant, the owner of Alipay, can leverage the popularity of the mobile payment service to gain more data and insight on user habits. In September, Ant [unveiled](https://www.bloomberg.com/news/articles/2023-09-08/ant-unveils-ai-language-model-for-wealth-management-insurance) two applications powered by its financial large language model. One is known as Zhixiaobao, which answers questions for customers; and the other, Zhixiaozhu, is an assistant for financial professionals.