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Tuesday, August 25, 2020, 18:04
Jack Ma's Ant Group files for IPO in HKSAR, Shanghai
By Bloomberg
Tuesday, August 25, 2020, 18:04 By Bloomberg

This undated photo shows a logo of Ant Financial, the financial arm of e-commerce giant Alibaba, in Hangzhou, Zhejiang province. (PHOTO / VCG)

Billionaire Jack Ma’s Ant Group filed for an initial public offering in the Hong Kong Special Administrative Region and Shanghai to bankroll its expansion in financial services and bolster its lead as China’s largest online payments platform.

READ MORE: Hong Kong looks to speed up IPO process to reduce risks

Ant will use the proceeds from the sale to expand cross-border payments and enhance its research and development capabilities, it said in a filing Tuesday, without providing a share price range or amount to be raised in the IPO.

The simultaneous listing could mark one of the biggest debuts in years, and even top Saudi Aramco’s record US$29 billion IPO, a person familiar has said

The crown jewel of the sprawling Alibaba empire, Ant has been accelerating its evolution into an online mall for everything from loans and travel services to food delivery, in a bid to win back shoppers lost to Tencent Holdings Ltd. With data from a billion users of its Alipay app at its back, Ant is pushing broadly into financial services, delivering technology such as artificial intelligence, robo investing and lending platforms.

READ MORE: Ant Group 'plans consumer finance firm' in growth push

The simultaneous listing could mark one of the biggest debuts in years, and even top Saudi Aramco’s record US$29 billion IPO, a person familiar has said. The firm is targeting a valuation of about US$225 billion, based on an IPO of about US$30 billion if markets are favorable, people familiar with the matter have said. Bernstein estimated that Ant’s value has climbed to about US$210 billion from US$150 billion two years ago, making it more than twice the size of Wall Street’s biggest securities firms.

Ant Group is targeting a valuation of about US$225 billion, based on an IPO of about US$30 billion if markets are favorable, people familiar with the matter have said

Ant has picked China International Capital Corp, Citigroup Inc., JPMorgan Chase & Co. and Morgan Stanley for its Hong Kong offering. It picked CICC and CSC Financial Co to lead the Shanghai share sale.

Alipay transactions

The preliminary IPO filing shed some light on Ant’s finances. Alipay’s total transaction volume reached 118 trillion yuan (US$17 trillion) in the 12 months ended in June. The app had 1 billion users and 711 million monthly active users, according to the filing. More than 80 million merchants leveraged the Alipay app to conduct business, and Ant partnered with more than 2,000 financial institutions.

The sale offers a potential windfall for a raft of US private equity firms, including Silver Lake Management LLC, Warburg Pincus LLC and Carlyle Group Inc, which all invested at least US$500 million in the firm’s latest 2018 funding round, people familiar with the matter have said. Credit Suisse Group AG also put in US$100 million.

ALSO READ: HK's global IPO crown will be difficult to sustain in 2020

Ant’s IPO also helps Hong Kong Exchanges and Clearing Ltd, which is seeing a renaissance of tech listings after it relaxed rules in the wake of losing the Chinese mainland’s biggest tech firms -- including Alibaba Group Holding Ltd, which owns a third of Ant -- to New York. Alibaba returned with a US$13 billion secondary listing last year in Hong Kong.

Like Alibaba, Ant has hit the brakes on its US expansion as political and trade tensions between China and the US have escalated. Ma said in 2018 that his promise to create 1 million US jobs was impossible to fulfill because of the trade tensions.

Instead, Ant has focused its offshore ambitions on building its presence in the rest of Asia, working with nine payment startups including the owners of Paytm in India and GCash in the Philippines.

Domestically, it’s expanding into consumer and technology services. Its technology solutions include services in cloud computing, artificial intelligence, blockchain and risk control. Ant aims to assist banks to dole out loans to consumers, and partner with brands to attract and manage customers.

 


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