Will Jack Ma’s Ant Group have the biggest IPO ever?
Ant Group, the Alibaba-affiliated financial technology giant, filed yesterday for a massive IPO on both the Hong Kong and Shanghai STAR stock markets. It is estimated to be worth more than $200 billion, meaning its listing could be one of the biggest in history.
Jack Ma (Mǎ Yún 马云), the co-founder of Chinese ecommerce giant Alibaba, regularly exchanges the title of China’s richest man with Pony Ma (马化腾 Mǎ Huàténg), the founding CEO of China’s other massive internet company, Tencent. But Jack may soon be able to boast of an achievement that his rival probably cannot replicate: leading two companies toward world-record IPOs.
Ant Group, the Alibaba-affiliated financial technology giant, filed yesterday for a massive IPO on both the Hong Kong and Shanghai STAR stock markets, which will “likely earn a stratospheric…valuation” the Wall Street Journal reports. The listing process could conclude by October, the WSJ says.
- When Alibaba went public on the New York Stock Exchange in 2014, it was the largest listing in history at the time, but Ant Group could surpass it if it attains the “more than $200 billion market valuation” that it is reported to be seeking.
- Jack Ma announced last year that he was moving on from his helm at the top of Alibaba, but one of the key details revealed in the Hong Kong prospectus is that “Ma effectively controls 50.52% of Ant,” Caixin reports.
More details on Ant Group, as revealed in its stock market filings:
- Half of the Chinese population, or 711 million out of 1.4 billion people, are monthly active users of Alipay, the payments app that Ant Group is known for.
- But Ant Group gets most revenue elsewhere: “While Alipay was the main contributor to Ant’s massive scale, its credit system-based lending, wealth management, and insurance businesses for consumer and commercial customers…is gaining a big momentum, taking up 56.2% of its entire revenue, overtaking Alipay,” PingWest points out.
- Revenue is up 38% year-on-year, reaching $10.53 billion in the first half of 2020, per TechNode.
- Profits are through the roof: The company made more net income in the first half of 2020 ($3.18 billion) than in the entirety of 2019 ($2.63 billion).
Why Ant Group’s listing is such a big deal
Ant will be the largest company to ever go public in Hong Kong, and in the case of its Shanghai listing, it will be by far the most significant company on any mainland Chinese stock market.
Then there’s this: The U.S. has scared away Chinese businesses from listing on American markets, and Beijing is smiling as China’s most successful companies come home at last. In Hong Kong, the companies get the best of both worlds: less rigorous auditing requirements than U.S. regulators are now pushing, and continued access to international capital. A “Beijing-based investment banker” tells Caixin (paywall) that Ant “will try to tap more international investors by putting the major portion of the offering in Hong Kong.”
Read more:
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The Hong Kong Stock Exchange’s half-trillion-dollar opportunity / The China Project
Our explanation of how a “series of lucky windfalls and policy shifts” has led a shift in Hong Kong’s financial favor. -
Ant’s IPO filings reveal scope and momentum of fintech giant’s business / Caixin (paywall)
“Ant said it will adopt a one-share, one-vote share structure in both the Shanghai and Hong Kong listings rather than a widely speculated dual-class share structure.” - Inside Ant Group’s giant valuation: One billion Alipay users and big profit margins / WSJ (paywall)
- New consumer lending arm gives Ant Group license to lend a lot more / Caixin (paywall)
