(Bloomberg) – Billionaire Jack Mani Ant Group is set to pull out what could be the largest initial public offering fur ever by listing together in Hong Kong and Shanghai. It is said to run the gun for a 225 billion valuation, making it the fourth largest financial company in the world.
Offshore out of 2011 Chinese giant Alibaba Group Holding Limited, the pay firm has defined and dominated the Chinese payment market through its ubiquitous Ellipse application. It also operates the huge Uaabao Money Market Fund and Huawei and Gibei Consumer Loaning Units.
Located in Hangzhou, a metropolis extending south of Shanghai, its ambitions run deeper than just money. Here is a thumbnail look at the challenges facing business units and pay.
Alipay: A Tr 17 trillion machine
The world’s largest digital payment platform was created in 2004 as an escrow service for Alibaba to secure transactions on the e-commerce site. Payments To warn customers about online payments, the service was a hit and quickly spread to other platforms.
The mobile version, launched in 2009, once had a 75% market share, but has seen its share slide at around 55% in competition with Tencent Holdings Ltd.’s Vechat Pay.
Alipay has 711 million active users, mostly in China, who tap to buy everything from instant coffee to real estate, paying 17 17 trillion in the 12 months to June. But it is also becoming less and less important to the ant and has contributed 36% to its revenue in the first half of this year, up from 50% just two years ago.
Losing ground in the payments market was one reason Ante had already scrapped earlier plans for an IPO in 2017, acquaintances at the time said. Now it is a much more diverse company.
Hubei and JBB: A Lone Feast
For those who do not have cash to spend through Alipay, Ant runs services that cover small unsecured loans: Hubei (Just Spend) and Jibei (Just Land). The former focus on fast consumer loans for the purchase of iPhones and fridges, while the latter provide money for anything from education to travel.
Ant uses some of its capital for this loan, but most of the money comes from banks, with the firm acting as a gateway. The platforms lent to about 500 million people in the 12 months to June, charging an annual rate of about 15% on its small loans. By 2021, their lending could reach about 2 trillion yuan, according to Goldman Sachs Group Group Inc.
In the company’s credittech business, which includes Hube and GB, it is the single largest revenue generator, contributing a total of% of% in the first six months of the year.
The company is now applying for a license to set up a consumer finance company. The new entity will increase the lending capacity of the entity as consumer finance companies are allowed to lend their capital 10 times compared to two to three times the profit of the existing micro-loan companies.
Uebao: The Great St.
With hundreds of millions flocking to Alipay, Ante created a money market fund in 2013 that allowed people to earn interest on cash parked in the app, investing as little as 1 yuan. Tianhong Yu’o Bao Money Market Fund is one of the largest in the world with a net worth of about 3 173 billion. But it has shrunk since regulators took steps to limit how much each investor can invest in the fund.
In 2018, Ant opened the platform to third parties. It now offers funding options from more than 20 asset managers. He founded Invesco Ltd. Has partnered with companies including, which has increased the size of a fund 300 to 400 times by March. This year, Ante teamed up with the Vanguard Group to offer a robot advisor to let the US giant move into China.
The unit participating in Uebao Ant has a 15% revenue share this year, the same as in the previous three years.
Credit scoring
Ants launched a credit scoring service called Zima Credit in 2015, using the vast amount of data it collected on cost and lending patterns. If users prefer the service, the ant checks on transaction history and also uses data from third-party providers to verify credit eligibility. Ants charge companies that charge a fee for the service and if customers get an adequate score, they can avoid paying a deposit on everything by renting a bike or booking a room in a hotel like Marriott.
Xianghubao: Insurance for pennies
Ants make many powerful colonies. The company entered the insurance market in 2019, creating a health care product called Xiangubao, which allows people to pay a small monthly fee to help cover the treatment costs of members suffering from diseases such as cancer, Alzheimer’s and Ebola.
Antony Insuretech also sells insurance premiums from third-party companies, and it makes cuts. Unit revenue rose 47% to 6 billion yuan in the first quarter, accounting for 8% of total sales.
Global headwinds
The ant’s U.S. Had grand plans for, but due to growing trade and political tensions between the world’s two superpowers it has now been put on ice. In the U.S. in 2018. Promised to create 1 million jobs in
Instead, Ant has focused on troubled ambitions to increase its presence in the rest of Asia, where it is working with nine payment startups, including Paytm in India and owners of JKesh in the Philippines, targeting billions. It also seeks to build more merchants abroad to use Alipay, so that its Chinese customers can use it while traveling.
Controversies: Yahoo!
Citing the risks of foreign ownership in the business of highly sensitive payment systems due to its impact on financial stability and data collection, Jack Mae entered the Alibaba-controlled company in 2011. Yahoo! Inc. And Softbank Corp. held a majority of Alibaba at the time. The move was disputed by Yahoo and the companies struck a deal in 2014 before Alibaba’s record 25 25 billion IPO, in which Alibaba received a share of Antini’s earnings.
The deal was canceled when Alibaba bought a 33% stake in Ant in 2018. Ant now has other foreign investors, including Wagerberg Pincus LLC, Carlyle Group Inc. And Silver Lake Management LLC.
Anton shut down its Zhao Kai Bao platform after it defaulted on bonds sold by the platform after the Chinese telecom company Kosan Group in Guangdong Province. When Zhao Kai Bao was first created, the vision was to create a platform that would allow small businesses and individuals to borrow directly from investors.
Dangers ahead
The rise of the ant and the dominance of China’s financial landscape over it has gone unnoticed by the country’s regulators. The risk of the Chinese central bank creating a digital yuan is part of the pressure to control the stability of its payment system. The ant has faced regular scrutiny from the authorities, investigating everything from its escrow service to lending risks.
Ant warned in its prospectus that US-China trade tensions could jeopardize its business as it prepares for an IPO. If the U.S. Imposing some restrictions could affect the ant business in Southeast Asia and India, for example.
In 2018, the U.S. Anton’s attempt to acquire MoneyGram International Inc., a located remittance company, failed. Advised to stop further investments in Zomato, restaurant aggregators and food delivery startups this year due to changes in foreign investment rules in India.
Who owns the ant?
An IPO will make a lot of people very rich and Jack Ma even richer. By controlling the shares held by Hangzhou Junhan and Hang Ngzu Juno, it has 50.52% voting rights in Ant. Mae said it intends to reduce its economic interest to ants by no more than 8.8% in the future and is also donating 611 million shares to the charity.
Others who stand to make the bundle will include Anthony chairman Eric Jing and 17 other current and former Alibaba and ant officials billionaires.
But the full scope of those who stand behind the ants is unclear, as Junhan and Junao do not disclose a comprehensive list of people who gain financial interest through direct shares or proxy contracts.
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