Published: Sun, February 04, 2018
Entertaiment | By Minnie Bishop

Profits leap at Alibaba as it eyes digital stake

Profits leap at Alibaba as it eyes digital stake

The company is expected to be the next blockbuster listing of Chinese tech firm, although Ant Financial hasn't given a timetable for the planned initial public offering.

The prospectus issued by Alibaba in August 2014 disclosed this potential trading arrangement.

The company also said it would buy a 33% stake in Ant Financial, its payment affiliate which operates Alipay, in exchange for certain intellectual property rights it owned.

While no cash is changing hands, Ant Financial will end royalty payments to Alibaba which were worth more than US$300 million in the last fiscal year, the report said.

Ant Financial has had a series of setbacks recently. The battle between the two big players Zomato and Swiggy just got more interesting with Zomato raising $200 million from Ant Financial.

The company also raised its revenue growth forecast for the 12 months ending March to 55 to 56 percent, up from a previous estimate of 49 to 53 percent.

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Alibaba, which was founded by Jack Ma, the internet entrepreneur, is the world's second largest e-commerce company after Amazon.

"An equity stake in Ant Financial enables Alibaba and our shareholders to participate in the future growth of the financial technology sector, as well as the benefits of user growth and improved customer experience", Zhang said.

Ant Financial is now 76.4% owned by Alibaba's management and employees. This announcement was made alongside their massive quarter report today.

China's e-commerce giant Alibaba said Thursday that its revenue jumped 56 percent year on year to 83 billion yuan (about 12.7 billion US dollars) in the third fiscal quarter.

Core ecommerce revenue increased 57 per cent to $11.3 billion and cloud computing revenue jumped 104 per cent to $553 million.

An investment in Zomato is largely seen as a move by Ant Financial to continue to follow Chinese tourists in South-East Asia (one of the largest markets for Zomato in terms of traffic is Jakarta), Australia and New Zealand.

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