Jack Ma-backed Ant’s profit plunges 56% amid overhaul

The Hangzhou-based company contributed about 3.18 billion yuan ($452 million) in profit to Alibaba Group Holding Ltd in the three months ended December 31, a filing showed on Thursday. Based on Alibaba’s one-third stake in Ant, that translates to an estimated 9.6 billion yuan in profit for Ant. This compares with an 83% drop in the previous quarter. Ant’s earnings trailed a quarter behind Alibaba’s.

The company declined to comment in an emailed statement.

Ant is awaiting a financial holding company license, more than two years after authorities torpedoed its planned initial public offering. The company was again valued at $63.8 billion by Fidelity Investments as of November, down significantly from its $235 billion peak.

Billionaire Jack Ma, who has largely stayed out of the public eye in recent years, has said he will hand over control of the company amid a widespread retrenchment. He returned to China in March after a long stay abroad.

In signs of progress, regulators recently allowed Ant’s consumer lending affiliate to raise capital. In January the head of Hangzhou’s Communist Party praised the company for following his lead, marking a softer stance towards the firm that was once controlled by Ma.

Ant President Eric Jing highlighted the support private companies are receiving from the government in a February state-media report. He stressed that “the country has not changed its stance or level of support for the private economy,” and that the government expects platform operations to continue to create jobs and remain competitive internationally.

In a filing last July, Alibaba reiterated that Ma “intends to reduce and thereafter limit his direct and indirect economic interest in Ant Group over time” to no more than 8.8%.