Alibaba’s payment group Ant Group, which has recently been valued at $ 150 billion, has announced its long-awaited public offering with a double listing in Shanghai and Hong Kong.
Ant, founded by Jack Ma, has become China’s dominant mobile payment company with 900 million annual users. But it has also run into regulatory concerns about its outsized role in the financial sector and its profitability.
A senior Ant executive, who did not wish to be named, said the company had hoped to announce its listing to “secure Beijing’s full support.”
The company did not provide a timeline for its listing or say how much money it wants to raise. A person close to Ant suggested that the process was in its early stages. A list of even a small portion of its shares would represent one of the largest IPOs of an Asian company.
“Becoming a public company will improve transparency for our stakeholders, including customers, business partners, employees, shareholders and regulators,” said Chief Executive Eric Jing.
Ant said he would seek a double listing in both Hong Kong and the one-year Star meeting in Shanghai, a technology-focused exchange that China hopes will rival Nasdaq.
The company was last valued at $ 150 billion in mid-2018 after raising around $ 14 billion from investors such as Temasek, General Atlantic, Warburg Pincus, and Baillie Gifford.
In recent secondary market transactions, small blocks of stocks have changed hands to levels that imply a valuation of more than $ 200 billion, according to several people familiar with the matter. PayPal, the American financial technology company is valued at $ 204 billion.
Ant has recently changed its name from Ant Financial to Ant Group, and has repeatedly stressed that it is a technology company, rather than a financial company.
But it maintains a strong footprint in China’s financial system, with more than 600 million users depositing funds into its Yu’E Bao money market fund. The provision of digital financial services such as wealth management, online loans and insurance contributed more than 50 percent of its income in the year through the end of March.
Your Alipay app has slowly become a “super app,” or hub for its growing ecosystem of services, from restaurant reviews to online shopping at Alibaba’s Taobao market.
In 2011 Jack Ma transferred Alipay, as Ant was called, from Alibaba to an entity he controlled, sparking a dispute with Yahoo and SoftBank, two of Alibaba’s largest shareholders at the time. Ma said he must comply with Chinese regulations that prohibit foreign ownership of financial businesses.
Ma maintains its controlling stake in the company, but last year Alibaba traded its claim to Ant’s 37.5 percent pre-tax profit for a 33 percent equity stake after gaining regulatory approval.
The company has not yet released its financial statements, but Alibaba records part of its earnings after a quarterly delay, providing an estimate of its earnings.
Alibaba’s first-quarter finances implied that Ant had an estimated profit of Rmb15.5bn for a slightly lengthened fourth quarter last year.
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