Mainland giant tech Alibaba (9988) saw its net profit fall 5 percent to 45.14 billion yuan (HK$54.30 billion) for the quarter to the end of June with lower-than-estimated revenue.
The first-quarter revenue climbed 33.81 percent year-on-year to 205.7 billion yuan ($31.8 billion), compared with the 209.4 billion yuan average of analyst estimates. Commerce revenue grew about 35 percent to 180.24 billion yuan in the quarter, compared with estimates of 184.23 billion yuan.
The company also announced it was boosting its share buyback program by 50 percent to US$15 billion (HK$117 billion). Alibaba's shares were down 3 percent in New York as of 10pm yesterday.
Alibaba, among the first of China's internet giants to feel the heat from Beijing, has been closely watched for clues to the real-world impact of the upheaval that has ensued since regulators went after industries from online commerce to ride-hailing and education technology.
Months after swallowing a US$2.8 billion fine for violations such as forced exclusivity with merchants, Jack Ma's flagship e-commerce firm is plowing money into areas like its bargains platform and community commerce to offset slowing growth, at a time when rivals like Pinduoduo and JD.com (9618) are eroding its dominance in China's e-commerce sales.
Meanwhile, Ant Group's profit fell to US$2.1 billion in the March quarter after Chinese regulators thwarted its record initial public offering and told it to overhaul its sprawling operation.
Ma's fintech giant contributed nearly 4.5 billion yuan to Alibaba Group Holding's earnings, a company filing showed yesterday. Based on Alibaba's one-third stake in Ant, that translates to 13.6 billion yuan in profit, down 37 percent from the previous three months. Ant's earnings lag one quarter behind Alibaba's. Ant declined to comment.
The fall in profit underscores the challenges facing Ant following a widespread crackdown on China's most powerful technology corporations. In response, the country's largest fintech agreed to turn itself into a holding company that will be regulated more like a bank.
Regulators have also issued a battery of proposals that threaten to curb Ant's dominance in online payments and scale back its expansion into consumer lending and wealth management.
The company is boosting its share buyback program by 50 percent to US$15 billion. SING TAO
