Ant Group IPO: Dual Listing Plans In Shanghai And Kong Kong

At a US$200 billion valuation, Ant Group’s IPO of even a small portion of its shares could lead to one of the largest IPOs in history

Ant Group, the parent company of China’s largest mobile payments business Alipay, announced that it has started the process for an Initial Public Offering (IPO) with dual listing on the Shanghai Stock Exchange’s STAR board and The Stock Exchange of Hong Kong Limited, according to a statement released on Monday.

Ant Group, formerly known as Ant Financial, became the world’s most valuable financial services company in 2018 after a record $14 billion fundraise in June, 2018 which valued the startup at $150 billion.

According to a report by Economic Times in January citing anonymous sources, Ant Group’s shares were being offered privately at levels that valued the company at $200 billion.

Recent reports by Bloomberg and The Wall Street Journal also indicate that the company is going to seek a valuation of $200 billion for its IPO, which could lead to one of the biggest IPOs in history. However, the company has not disclosed any timeline for the IPO or the amount it aims to raise.

A valuation of $200 billion would also make Ant Financial bigger than some of the largest banks in the U.S. including Goldman Sachs and Wells Fargo.

Alipay was launched in 2005 as a Quick Response (QR) Code-based payment system, and has since gone on to become the world’s largest payment and lifestyle platform, according to their website.

In 2011, Alibaba sold control of the cmpany to a group contolled by Alibaba Founder Jack Ma, a move that raised controveries as Yahoo, one of the largest shareholders of Alibaba at the time claimed that the transaction was carried out without its knowledge.

In 2014, Jack Ma founded Ant Financial to not only oversee Alipay, which currently has over 900 millions Chinese users, but to venture further into fintech, and today offers services that include wealth management, small and micro business loans, and insurance.

Alibaba currently owns 33% stake in Ant Group, and the listing announcement pushed its share prices by over 5% on Monday.

According to Alibaba’s Q1 2020 financials report, Ant had an estimated $2.2 billion profit during Q4 of 2019 while Alibaba reported total revenue of $16.14 million in Q1 of 2020, registering an increase of 29% year-on-year.

According to the press release Ant Group aims to create the infrastructure and platform to support the digital transformation of the service industry, and strives to enable equal access to financial and other services that are inclusive, green and sustainable.

According to the press release, the listings will help the company accelerate its goal of digitizing the service industry in China and drive domestic demand, and expand investment in technology and innovation, while helping it to position itself to develop global markets with partners.

“The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets,” said Eric Jing, Executive Chairman of Ant Group.

“Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders and regulators,” he added.

Header image courtesy of Ant Financial

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