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Original title: Countdown to the ants list
The issue price of share A was set at 68.8 yuan / share, and the issue price of share H was HK $ 80 / share. The Ant Group IPO, which was “comparable to a spy movie”, finally revealed the suspense of the issue price on the night of October 26. At the same time, Ant Group also revealed for the first time the alignment of strategic investors for the Sci-tech Innovation Board IPO, including 29 domestic and foreign investors, covering sovereign wealth funds, insurance companies, banks, large state-owned companies and private businesses. Many brokerage firms predicted that because the price is cheaper than expected and market sentiment is enthusiastic, the “new strikes” ants will be more competitive than expected. According to the announcement, Ant Group’s preliminary investigation intends to purchase a total of more than 76 billion shares, and the overall offline subscription multiple has reached 284 times.
A + H shares plan to raise 231.2 billion yuan
According to the official website of the Shanghai Stock Exchange, the initial investigation of Ant Group’s IPO has been completed. After nearly 10,000 investment institution accounts, the final issue price of A shares was determined at 68.8 yuan per share, with a total market value of 2.1 trillion yuan, which is about 2.5 in comparison. with the previous forecasts of many investment banks. The valuation is RMB 3 billion and the discount is about 20% -30%.
The issue price of Ant Group’s Hong Kong shares was also announced on the same day. H shares cost HK $ 80 per share, which is basically the same as A shares after excluding exchange rate effects. According to the Ant Group announcement, H shares are expected to begin trading at 9 am on November 5, 2020. H shares will trade in a batch of 50 shares. The stock code for H shares is 6688.
Based on the issue price announced by Ant Group and Ant Group will issue no more than 1.67 billion new shares in A shares and H shares respectively, Ant Group plans to raise approximately US $ 34.5 billion (approximately RMB 231.2 billion) through the A + H. yuan share IPO). This means that the Ant Group is expected to break Saudi Aramco’s listing record last year of US $ 29 billion in financing and become the world’s largest IPO.
In terms of price-to-earnings ratio, based on earnings forecasts from leading investment banks such as CICC, Morgan Stanley, Citigroup and JPMorgan Chase, Ant Group’s expected price-to-earnings ratio for the next two years (2022) is only 24 times. The P / E ratio is reported to be an important benchmark for measuring the growth space of publicly traded companies. It is calculated by dividing the market value (valuation) by the net profit. A relatively low P / E ratio means that the stock price is “cheap.” For companies that are not publicly traded, the industry generally uses the expected P / E ratio to better reflect future growth potential.
According to Wang Pengbo, Senior Financial Industry Analyst, “Ant Group’s valuation is in line with market expectations from today’s point of view. Either from a price-earnings perspective or from a growth growth perspective. Future performance, the 2.1 trillion yuan valuation is more appropriate. Stock price growth has given it room. “
Disclosure of Strategic Investor Alignment
The world’s largest IPO is about to be born, and the industry is also paying close attention to Ant Group’s line of strategic shareholders and investors. According to Ant Group holdings, after the share conversion, Hangzhou Junhan, Hangzhou Junao and Alibaba respectively own 6.75 billion shares, 4.79 billion shares and 6.893 billion A shares of Ant Group.
At the same time, Ant Group also revealed for the first time the alignment of strategic investors for the Sci-tech Innovation Board IPO, including 29 domestic and foreign investors, covering sovereign wealth funds, insurance companies, banks, large state-owned companies and private businesses. Specifically, in addition to previously disclosed Alibaba, Ant Group’s strategic investors on the Sci-tech Innovation Board include: National Social Security Fund, Chinese Investment, Canadian Pensions, Singapore Government Investment, Temasek, Abu Dhabi Investment Authority and other global sovereign wealth funds; Insurance companies such as China Life, PICC, Taiping, China Re, Sunshine and Taikang; large state-owned companies such as PetroChina, China Merchants, Minmetals and COSCO Shipping. Additionally, Bank of Communications International, a subsidiary of Bank of Communications, is also a strategic investor.
In addition, Ant Group also disclosed in the announcement the results of the allocation to strategic investors, including China Merchants Fund, E Fund, Southern Fund, China Universal Fund, Harvest Fund, China Asset Management, Penghua Fund, China Europe The eight fund companies of the fund became strategic investors in Ant Group, with a total allocation of 11.972 billion yuan.
It is worth noting that the distribution of the five Ant Group strategic allocation funds that had been in vogue before, the innovative hybrid securities investment fund of closed operation in the next 18 months (hereinafter, “Innovation the next 18 months “).
The announcement shows that Penghua Innovation has the highest number of allocations in the next 18 months, with a total of 17.43115 million shares allocated, and the allocation amount is 1.199 billion yuan, which is the fund with the largest number of allocation and amount among the five funds. In the next 18 months, CEIBS Innovation and E Fund will receive 17,4244 million shares and 17,4023 million shares, respectively, and the allocated amount is approximately 1,199 million yuan and 1,197 million yuan. In the next 18 months, China Innovative and China Universal Innovation will receive 17,3959 million shares and 17,362 million shares, respectively, with a distribution amount of approximately 1,197 million yuan and 1,195 million yuan. At the same time, the sales restriction period of the above 5 funds is 12 months.
According to data from Flush iFinD, the elevated scales of the previous five innovative funds in the next 18 months are around 12 billion yuan. Based on this estimate, the five innovative funds that will participate in Ant Group’s strategic placement in the next 18 months are close to the upper limit of 10%.
According to an analysis by a senior investment banker, Ant Group’s introduction of incremental investors to the Sci-tech Innovation Board will help expand the Sci-Tech Innovation Board’s investor base. The entry of more qualified investors will attract more high-quality targets to be included in the Science and Technology Innovation Board, and then mature institutional investors will lead issuance and pricing, eventually forming a virtuous circle.
It is worth noting that Ant Group has established a stricter lockdown period for strategic investors than the 12-month regulatory requirement. For strategic investors other than Sponsorship and Co-investment Public Offering and Ecosystem Matching Funds, among the allocated shares that must be pledged, 50% of the shares are restricted for 12 months and 50% of the shares are restricted for 24 months. This also means that the strategic investors mentioned above, including the world’s top sovereign wealth funds and Alibaba, are subject to the lockdown period.
The offline subscription multiple is as high as 284 times
According to the announcement, the initial Ant Group query intends to subscribe for a total of more than 76 billion shares, and the general offline subscription multiple has reached 284 times, which shows the degree of popularity. The issuance plan shows that Ant Group will issue no more than 1.67 billion new shares in A shares, of which 1.34 billion shares will be offered for initial strategic placement, and 334 million shares will be available for Institutional and individual investors for “new” stocks (before the Green Shoe mechanism). . Calculated according to the price per share, the total fundraising scale of green shoes A shares is 115 billion yuan, of which the scale of “new” for A share institutions and individual investors exceeds 22 billion yuan. yuan.
Based on Wind data, the average online lottery win rate for all new A-share issues in the last ten years was just 0.045%. It is equivalent to 10,000 people going to “play new”, only 4.5 people can hit. Many brokerage agencies predict that because the price is cheaper than expected, the agency is actively underwriting, and market sentiment is enthusiastic, the “new” ants will be more competitive than expected.
According to the listing and issuance agreement, Ant’s “new” online subscription will take place on October 29. Additionally, thanks to Ant’s strategic placement of new funds, more than 10 million people have “made new” Ant shares in advance.
According to the latest prospectus, from January to September 2020, Ant Group achieved an operating income of 118.11 billion yuan, an increase of 42.56% from 82.909 billion yuan in the same period of the previous year, mainly due to growth of revenue from digital fintech platforms, followed by digital payments and merchants. Growth of income from services; realized gross profit of 69.549 million yuan, an increase of 74.28% from 39.907 million yuan in the same period last year; Total gross profit margin increased from 48.13% in the same period last year to 58.84%, due to the company’s overall revenue growth faster than transaction costs.
“Ant Group’s financial technology revenue has increased year over year. This shows that the growth rate of Ant Group’s financial technology services is getting faster and faster. People are more optimistic about the growth rate of future performance. From Ant. Good user and merchant coverage achieved by payment leverage and credit-backed A complete system of financial products backed by credit is also a key factor for good support. ”However, Wang Pengbo also pointed out how to maintain growth of high speed in future revenue and how to deal with market competition and user competition brought about by the emergence of new forces in the payments industry. This remains a challenge faced by the Ant Group. Beijing Business Daily Reporter Yue Pinyu Liu Sihong
