Alibaba Q3 Profit Rises, Lifts FY Revenue View;to Buy 33% Stake In Ant Financial

(RTTNews) - Alibaba Group Holding Limited (BABA) reported that its net income attributable to ordinary shareholders in the third-quarter ended December 31, 2017 was RMB 24.07 billion or US$3.70 billion, an increase of 35% from RMB 17.86 billion in the same quarter of 2016. Quarterly Earnings per share was RMB 9.20 or US$1.41 per shares, an increase of 33% from RMB 6.94 last year.

Alibaba said it agreed to acquire a 33% equity interest in Ant Small and Micro Financial Services Group Co., Ltd. or Ant Financial. The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.

Looking ahead for fiscal year 2018, the company now expects revenue growth of 55 percent - 56 percent, higher than previously expected growth of 49 percent to 53 percent.

Excluding share-based compensation expense, non-cash revaluation gain and certain other items, non-GAAP earnings per share for the third-quarter was RMB10.61 or US$1.63, up 18% from RMB9.02 in the previous year.

Revenue for the third-quarter was RMB 83.03 billion or US$12.76 billion, an increase of 56% from the prior year's RMB 53.25 billion in the same quarter of 2016. The increase was mainly driven by the robust revenue growth of our China commerce retail business, international commerce retail business and Alibaba Cloud, as well as the consolidation of Cainiao Network.

Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial. There will be no cash impact to Alibaba following completion of the transaction.

Upon closing, the companies will terminate the current profit-sharing arrangement under which Ant Financial pays royalty and technology service fees in an amount equal to 37.5% of its pre-tax profits to Alibaba.

The closing of the transaction is subject to customary conditions. Alibaba will acquire the equity interest in Ant Financial through a Chinese domestic subsidiary.