Saturday, 18th May, 2024
Saturday, 18th May, 2024

Alibaba revenues soar but Ant Group float uncertain

Chinese e-commerce giant Alibaba has posted strong results for the last quarter of 2020.

The company founded by Jack Ma saw revenues up 37% against the same quarter of 2019 to 221bn yuan ($34.2bn, £25bn).

But the results come amid continued uncertainty over the company’s financial affiliate Ant Group.

Alibaba said it was “unable to complete a fair assessment” of the impact of Ant’s stalled share market launch.

Strong growth in China

Alibaba’s chief executive Daniel Zhang attributed the firm’s strong results to China’s economic growth.

Although the world’s second largest economy saw sluggish progress compared to previous years, it was the only major economy to grow during the Covid-19 pandemic.

Strong results for Singles Day, Alibaba’s biggest sale of the year, also helped the company’s revenues.

“However, many are looking at the business and wondering where the next wave of growth will come from,” said Andy Halliwell, a retail analyst from technology consultancy Publicis Sapient.

Alibaba’s cloud computing revenues rose 50% over the same quarter last year, hitting $2.5bn and posting a profit for the first time.

Intense pressure

It’s not all good news for Alibaba, as its financial technology (fintech) affiliate Ant Group remains under intense scrutiny from China’s regulators.

The planned launch of Ant Group in November was due to become the biggest ever stock market debut, raising $37bn for the fintech.

Mr Zhang said Ant’s share market launch remained on hold indefinitely.

“Ant Group’s business prospects and [Initial Public Offering] plans are subject to substantial uncertainties,” the company said in a statement.

Analysts believe this could have a significant effect on the company, along with an investigation into Alibaba’s alleged monopolistic practices which was announced by regulators in December.

“If the Chinese government is looking to crack down on outspoken entrepreneurs and take a more conservative line with their larger tech businesses then this will dent investors’ confidence in the brand, and may create an opening for others to exploit,” said Mr Halliwell.

The Ant Group is China’s biggest payments provider, with more than 730 million monthly users on its digital payments service Alipay.

The company also has a consumer lending division, which takes fees from banks to match borrowers with lending services.

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