(Bloomberg) — Ant Group Co.’s quarterly profit surged more than 50-fold after it benefited from an investment gain, a major boon for the Chinese fintech giant founded by Jack Ma.
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The Hangzhou-based online finance firm contributed nearly 4.49 billion yuan ($618 million) of profit to Alibaba Group Holding Ltd. Considering Alibaba’s one-third stake in Ant, that translates to an estimated 13.6 billion yuan in profit for the three months ended Sept. 30, according to Bloomberg calculations based on Alibaba’s earnings report.
Ant’s earnings lag a quarter behind Alibaba’s. The fintech company attributed the sizeable profit to a net investment gain, versus a loss from such activity the previous year. The results compared with a 193% jump in profit for the second quarter.
Ant declined to comment in an emailed statement.
Alibaba posted its fastest pace of revenue growth in more than a year in the December quarter, reflecting a turnaround in its commerce business and big strides into the critical field of AI.
Sentiment for China’s tech sector is improving, after President Xi Jinping met with prominent entrepreneurs including Ant and Alibaba co-founder Ma this week to signal Beijing’s endorsement of the private sector. The Chinese billionaire has been trying to motivate staff with visits, even though Ma no longer holds any management positions at Alibaba and Ant.
In December, Ma made a rare appearance at Ant’s 20th anniversary celebration, discussing the company’s future and opportunities brought by artificial intelligence. He acknowledged the challenges that Ant faces, adding that the company has matured and benefited from criticism.
Ant has made inroads in some areas of AI. The company set up a unit last year to focus on humanoid robot development, an Ant spokesperson said. The company rolled out a package of services including a “life assistant” app called Zhixiaobao, which helps people order meals, hail taxis and access other functions within its mobile payments app Alipay.
Last year, Ant enacted broad overhauls to its business, setting up independent boards for the international, database and digital technology units to pave the way for future spinoffs.
The moves came after Ma gave up control of Ant in 2023. China wrapped up its crackdown on the once high-flying internet sector by slapping more than $1 billion in fines on Ant and Tencent Holdings Ltd. in July 2023.