Alibaba released its 2022 fiscal year (April 2021-March 2022) and fourth quarter (January-March 2022) reports, revealing Ant Group's operating status in 2021. According to the financial report, the operating profit of Ant Group in the fourth quarter and the whole year of 2021 will decline, but the early overseas financial technology investment layout has entered the harvest period, and the net income from holding investment has increased. After the two-phase offset, the book profit of Ant Group will be stable. Contributed investment income of RMB 24 billion.
An industry analyst pointed out, "With the listing of Ant's early overseas investment companies, its overseas investment income will be considerable in 2021. After deducting this income, Ant's annual operating profit may drop by more than 20% year-on-year." Ali’s financial report has become a window for the outside world to observe Ant’s profits. In this financial report, Ali stated that despite the year-on-year decline in Ant Group’s operating profit in 2021, its investment income related to Ant Group still increased year-on-year, mainly due to the increase in the fair value of overseas investment assets held by Ant Group.
Ant Group's 2021 full-year operating profit decline has long been traced. After the release of Ali's financial report in the previous quarter, some market participants analyzed, "In the third quarter of 2021, after deducting the investment income of two overseas companies, Ant's operating income will drop by more than 40% month-on-month."
In 2021, four overseas companies invested by Ant in the early stage will be listed one after another: in July, Zomato, an Indian digital life service platform; in August, Bukalapak, an Indonesian e-commerce platform; in November, KakaoPay, the largest mobile payment platform in South Korea; One97 Communications, the parent company of Paytm, the largest mobile payment platform, went public.
The analyst said that according to public information estimates, Ant Group's investment income in 2021 may exceed 25 billion yuan. Part of it comes from the book income after the listing of the invested companies: Ant Group is an early investor in Zomato, Bukalapak and KakaoPay. If conservatively calculated by only doubling the income, Ant’s book income is about 19 billion yuan. In addition, when Paytm went public, Ant sold about 5% of its shares for a one-time gain of about 6 billion yuan.
This means that Ant's book profit calculated from Ali's financial report, after deducting these investment income, Ant's operating profit is estimated to be no more than 47 billion yuan, a year-on-year decrease of more than 20% in 2020.
In April last year, Ant Group announced a rectification plan, covering its payment, credit reporting, consumer gold and other businesses. Since then, many of Ant's businesses have entered a stage of contraction, including actively reducing the scale of Yu'e Bao, shutting down Huanbao, etc., while focusing on exploring technology commercialization and overseas development. It can be seen that Ant is striving to seek more business growth points to cope with the impact of financial business rectification.
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