FinTech: Ant Group, the Fintech Arm of Alibaba, To Float Hong Kong IPO

July 9, 2020 | FinTech, News
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According to a Reuters exclusive, Ant is looking for a valuation north of $200 billion.

Chinese fintech giant Ant Group, also known as the world’s most valuable unicorn, and previously called Ant Financial, is planning an IPO said Reuters. The news service quoted anonymous sources who also confirmed that Ant had been working with advisors on the sale of shares in recent months.

Ant’s IPO could be one of the biggest listings in 2020

The sources told Reuters that Ant would possibly sell between 5% and 10% of its shares. They said the company was initially planning for the flotation on both mainland China and Hong Kong exchanges simultaneously. However, it had veered around to Hong Kong due to the likelihood of a smoother listing process.

Fintech giant Ant Group

Previously known as Ant Financial, the fintech giant changed its name to Ant Group in May to avoid the more stringent regulatory scrutiny applicable to financial companies in China. Ali Baba Group (NYSE: BABA) owns 33% of Ant Group.

The company processes the bulk of mobile payments in China, including loans, payments, insurance, and investment services through various mobile apps. Its Alipay online payment service is one of the world’s largest payment and lifestyle platforms.

Reuters said the company generated a net profit of 17 billion yuan ($2.42 billion) on revenue of 120 billion yuan ($17.10 billion) last year according to financial documents seen by it. However, Ant Group claimed the information was incorrect.

In a fundraising round in 2018, Ant commanded a valuation of $150 billion. According to the Reuters’ sources, it is targeting a valuation of $200 billion in the IPO.

Hong Kong listing

The new security law implemented by China has cast a pall on Hong Kong’s future as a global financial center.

However, if Ant Group’s listing comes through, it would be a shot in the arm for the capital markets in Hong Kong.

Speaking to Channel News Asia, Aequitas Research analyst Ke Yan said the listing would “make Hong Kong equity market the top choice for access to leading Chinese tech and media companies.”

Related Story:   Alibaba’s “Escape Valve” Listing in Hong Kong Will Be Paperless

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