Ant Financial, which is raising funds valuing the Chinese payments unit at $150bn, made a net loss in the last quarter, Alibaba revealed in its quarterly results.
The Chinese tech titan, which is switching its profit sharing arrangement with Ant into an equity stake of 33 per cent, also bore the scars of investing in capital intensive areas and buying market share. Operating margins shrank from 25 per cent a year ago to 15 per cent in the last quarter of 2017.
However, the group — which sold a gross $768bn of goods over its ecommerce platforms last year — continued its crowd pleasing tactics of raising revenue guidance and trouncing analyst estimates.
Revenues are set to rise 60 per cent this year, said Maggie Wu, chief financial officer. In the fourth quarter revenues increased 61 per cent to Rmb61.93bn ($9.87bn) while net income attributable to ordinary shareholders hit Rmb7.56bn.
“Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce business and investments we have made over the past several years in longer-term growth initiatives,” said Daniel Zhang, Chief Executive Officer of Alibaba Group.
“With the continuing roll out of our New Retail strategy, our e-commerce platform is developing into the leading retail infrastructure of China. During the past year we also doubled down on technology development, cloud computing, logistics, digital entertainment and local services so that we are in a position to capture consumption growth in China and other emerging markets.”
Alibaba shares were up 1.6 per cent in pre-market trading in New York on Friday.
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