Alibaba Shares Up, Takes Ant Stake

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Alibaba Shares Up, Takes Ant Stake

Sales: The company reported revenue was up 56 percent during the quarter to 83 billion RMB ($12.8 billion).

"Importantly, an equity stake in Ant Financial enables Alibaba and our shareholders to participate in the future growth of the financial technology sector", said Daniel Zhang, Alibaba Group CEO.

Ant operates the world's largest mobile and online payment platform, Alipay that has 520 million Chinese users and over 200 financial institution partners in China. According to that agreement, Ant Financial would pay Alibaba fees for intellectual property and technical services every year, which is equivalent to about 37.5% of Ant Financial's pre-tax profit. Alibaba will acquire the equity interest in Ant Financial through a domestic subsidiary, the statement said.

Alibaba shares fell by 5.9%, the largest decline since June 2016, according to Bloomberg.

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.

Last year's event recorded 168.2 billion yuan (£19.33 billion) worth of transactions, a 39 per cent increase from the 2016 festival.

Alibaba is one of the world's most valuable companies, and its shares almost doubled in value past year.

"Given our strong performance and clear visibility as we approach the end of the fiscal year, we are taking up our 2018 fiscal year revenue guidance to 55 to 56 percent", said Maggie Wu, chief financial officer of Alibaba.

Both 7 Fresh and Hema integrate online and offline shopping - consumers can shop online from the comfort of their homes and have the groceries packed and delivered to their doorstep.

Although Alibaba's stock price recently broke through the US$200 mark, placing it in the US$500 billion market capitalisation club together with players such as Tencent and Facebook, the group's stock price plunged by about 6 per cent to close at US$192.22 on the NYSE following its earnings results.

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