Alibaba’s Ant Group Plans USD$200 Billion IPO

Asia Blockchain Review
August 2, 2020

From a recent Reuters report, Ant Group, the fintech arm of Chinese e-commerce giant Alibaba, plans a Hong Kong float as soon as this year and targets a valuation of more than $200 billion, according to sources that the publication contacted.

Apparently, it is looking to sell between 5% and 10% of its shares in an IPO, which could end up as one of the world’s biggest listings this year. Ant, based in China’s eastern city of Hangzhou, is 33% owned by Alibaba Group Holding Ltd and is controlled by Alibaba founder Jack Ma.

According to the publication, although valued at about $150 billion in its last funding round in 2018, small trades in the secondary market late last year gave it an implied valuation of $200 billion.
Techcrunch also reported recently that Ant Group has facilitated around $USD570 billion of assets under management for its partners offering money market funds, fixed income products and equity investment services too.
The company’s new head Hu Xiaoming, has set the ambitious goal for the firm to generate 80% of total revenues from technology service fees, which is quite a steep increase from the 50% in 2019.
Jack Ma, the founder of Alibaba has sold over USD$8.2 billion worth of shares over the past year, according to the company’s regulatory filing. The shares have gained more than 50% over the past year.
Just to recap, Jack Ma has stepped down as the executive chairman of Alibaba, and has handed the reins to Daniel Zhang. Zhang is now Alibaba’s Chairman and CEO.

In a related development, China said on Wednesday it will impose retaliatory sanctions on U.S. individuals and entities after U.S. President Donald Trump signed a law penalising banks doing business with Chinese officials who implement the new Hong Kong national security law.

The Chinese foreign ministry said in a statement that Beijing strongly opposes the latest U.S. action and urged Washington to stop interfering in China’s internal affairs, state television reported.

How this affects the current IPO scenario remains to be seen, but Alipay, is a big element in all this. As the world’s leading payment and lifestyle platform, it has targets to serve and sell to over 2 billion potential customers who are traveling across Europe as well.

According to Statista, Alipay is China’s most popular digital payment service, with 87 percent of the survey respondents saying that they use Alipay for their digital financial needs. At the moment, Alipay currently serves over 1.2 billon users together with e-wallet partners in the Republic of Korea, Thailand, Malaysia, the Philippines, Indonesia, India, Bangladesh and Pakistan.

Nielsen recently reported that over 93 percent of Chinese tourists would be willing to make purchases with their mobile phones and would increase their spending if options were available, while 60% of merchants surveyed that adopted Alipay reported growth in foot traffic and revenue.

The significance of Alipay and how it relates to the Ant Group is not an understatement, as it has evolved over the years from a digital wallet to a lifestyle enabler. Users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors and even purchase wealth management products from the app.

Alipay’s in-store payment service covers over 50 markets across the world, and tax reimbursement via the app is supported in 35 markets. It works with over 250 overseas financial institutions and payment solution providers to enable cross-border payments for Chinese travelling overseas and overseas customers who purchase products from Chinese e-commerce sites. The app currently supports 27 currencies.

Sources: Reuters, TechCrunch, Sina, & BusinessWire

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