OPEN APP
Home >Companies >News >Alibaba raises forecast, agrees to buy 33% of Ant Financial
Alibaba’s revenue in the 12 months ending March will rise 55% to 56%, up from a range of 49 to 53% previously. Photo: Reuters
Alibaba’s revenue in the 12 months ending March will rise 55% to 56%, up from a range of 49 to 53% previously. Photo: Reuters

Alibaba raises forecast, agrees to buy 33% of Ant Financial

Alibaba will buy new shares in Ant Financial in exchange for certain intellectual property rights, companies to terminate a current profit-sharing arrangement

Hong Kong: Alibaba Group Holding Ltd. raised its annual sales forecast and agreed to buy a 33% stake in its financial services affiliate.

Revenue in the 12 months ending March will rise 55% to 56%, the company said on Thursday. That’s up from a range of 49% to 53% previously. Alibaba will buy new shares in Ant Financial in exchange for certain intellectual property rights with the companies to terminate a current profit-sharing arrangement.

The e-commerce giant’s revenue growth has been underpinned by Chinese consumer strength and investments to link its business to traditional retailers. Billionaire founder Jack Ma’s splurged $13 billion since 2015 in brick and mortar companies—shaking up supermarkets and department stores, equipping them with management systems, and investing billions into artificial intelligence and cloud computing.

“Reacceleration in overall e-commerce growth shows the early benefits of Alibaba’s new retail strategy," Karen Chan, an analyst at Jefferies Group LLC wrote in her research report. Alibaba will “extend its last-mile reach to the 60% offline consumer population."

The company also posted third quarter results, with revenue and adjusted earnings topping estimates.

Shares of Alibaba climbed 2.3% in New York on Wednesday. The stock has gained 18.5% this year compared with a 4.4% gain for the NYSE Composite Index.

Ant Financial, known formally as Zhejiang Ant Small & Micro Financial Services Group Co., operates the Alipay payments system. Bloomberg

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperMint is now on Telegram. Join Mint channel in your Telegram and stay updated with the latest business news.

Close
×
Edit Profile
My Reads Redeem a Gift Card Logout