Because Alipay will turbo-charge Ant Group’s IPO
Ant Group, whose flagship app Alipay has helped drive China's digital payments boom, is preparing for dual listing in Hong Kong and Shanghai. All the details
Yesterday, the Chinese company Ant Group unveiled plans for a stock market debut that could put shares worth around $ 30 billion on the market.
The company, the fintech subsidiary of e-commerce giant Alibaba, has filed for a double listing in Hong Kong and the Star Market in Shanghai , China's response to Nasdaq.
Ant Group expects to sell shares of between 10% and 15% valuing the group over $ 200 billion. This would be the largest initial public offering in history.
The announcement comes amid mounting tensions as the Trump administration clamps down on Chinese companies.
WHAT IS ANT GROUP
Launched in 2004 by Chinese e-commerce giant Alibaba and its founder Jack Ma, Ant Group is headquartered as Alibaba in Hangzhou (East China). The Alibaba group has already been listed in the United States since 2014. Last year, Ma's group raised several billion euros in a second IPO in Hong Kong .
THE DETAILS OF THE OPERATION
As reported by the Financial Times , Ant Group revealed that it earned 18 billion RMB ($ 2.6 billion) in net profit last year. Unlike other fast-growing tech companies that have debuted on the stock exchange in recent years, Ant is profitable.
Ant Group has raised over $ 23 billion in private markets, including from US companies such as BlackRock, General Atlantic, Silver Lake and Warburg Pincus as Axios recalls. The most recent private valuation, last fall, was $ 200 billion.
The company could raise a record $ 30 billion from the ipo.
THE BIGGEST IPO IN THE WORLD
That would make it the largest IPO in the world since oil giant Saudi Aramco raised $ 29.4 billion last December, breaking Alibaba's record with a $ 25 billion stock market debut in 2014.
EVALUATION BY THE CAPOGIRO
Although Ant's announcement didn't reveal the company's valuation or how much it plans to increase on its stock market debut, analysts believe the company could reach a valuation of $ 300 billion. This would give it a higher valuation than Morgan Stanley and Goldman Sachs combined.
THE DOMAIN OF ALIPAY IN THE DIGITAL PAYMENTS SECTOR
More than half of Ant Group's 2019 revenue came from financial services such as loans, wealth management and insurance offered through Alipay.
Ant's record rating is based on the dominance of Alipay, which has become the dominant mobile payment business in China.
Along with mobile payments, over 700 million people per month and 80 million businesses use the service to pay bills, buy insurance, and invest in mutual funds.
The company said $ 16 trillion worth of transactions took place on Alipay last year, a fifth more than the previous year.
Meanwhile, Alibaba, which owns a 33% stake in Ant, is increasingly aggregating its services in the Alipay app.
TENCENT AND ALIPAY BEAT VISA AND MASTERCARD TOGETHER
David Dai, senior analyst at Bernstein Asset Managers in Hong Kong, told the BBC why the company is such an important player in China's digital payments industry.
“Together with Tencent, Ant processes approximately RMB 200 trillion (£ 22.5 trillion; $ 28.8 trillion) in payments and transfers per year. This is a larger volume than Visa and Mastercard combined. "
TAKE ADVANTAGE OF WIRECARD CHAOS
As Finimize pointed out last month, the German fintech company Wirecard scandal in June may have encouraged Ant to accelerate its expansion plans. Wirecard, after all, claimed to have a booming business in parts of Southeast Asia. Since things in the region aren't quite what they seemed, hypo may represent more of an opportunity than Ant initially hoped.
DUAL LISTENING
Ant Group plans to make its market debut on the Star board of the Shanghai Stock Exchange, which is seen as the Chinese equivalent of the US Nasdaq, and the Hong Kong Stock Exchange.
SNOBBATA WALL STREET
The decision to bypass the US stock exchange is a consequence of the tensions between Washington and Beijing.
As TechCrunch points out, Ant's choice of HKSE and Star Market follows the latest trend of Chinese tech firms trading stocks at home as Hong Kong and Shanghai make it easier for high-risk, innovation-driven firms to access finance. .
TENSIONS BETWEEN WASHINGTON AND BEIJING
The announcement came at a time of growing tensions between the US and China over a number of issues, including Beijing's handling of the coronavirus pandemic, Hong Kong's security law, tensions in the South China Sea and the ongoing trade dispute.
The Trump administration has played the latest move against Chinese tech companies. In fact, at the beginning of August, the president of the United States signed two executive orders to ban the TikTok app and the WeChat messaging platform.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/fintech/ant-group-ipo-alipay-wirecard/ on Wed, 26 Aug 2020 13:50:01 +0000.