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Ant Group, the biggest fintech company in China, is going public in Hong Kong and Shanghai stock exchanges, instead of New York’s. A subsidiary of Jack Ma’s Alibaba, Ant Group is expected to shatter all previous records of initial public offering(IPO) and surpass what its parent company raised ($21.8 billion) during its 2014 IPO.
Key Summary: JP Morgan estimates Ant Group’s market capitalization at $218 billion dollars. With 900 million users on its mobile transaction platform Alipay, Ant Group is looking at overseas for rapid expansion.
Ant’s financial services for fellow ants: The company has made it easier for consumers to invest or get a loan through a few clicks on smartphone applications. Now its goal is at aggregating all mobile transactions on its app.
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Alipay, provided by Ant Group, allows users to send money and chat over its messenger services, easily pay for online shipping, look for financial products like insurance or mutual funds and get loans in just a few tabs. With WeChat Pay of Tencent, the company divides up the Chinese mobile payment market which surpasses $8.3 trillion worth of transactions a year.
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The logo of Ant Group is, as easily expected, an ant, emphasizing its mission of broadening access to the financial system for everyone. The company defines itself not as a financial institution but as a financial service provider, looking to serve small business owners and individual consumers.
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JP estimates Ant Group’s market capitalization at $218 billion dollars, reaching that of the second largest bank in the US, Bank of America. If Ant Group offers 10~15% of its shares as it goes public—as most firms do during its IPO—the company is expected to raise more than the record amount that Saudi oil firm Aramco set in 2019 at $25.6 billion. Going public in 2014, Ant Group’s parent company Alibaba raised $21.8 billion at New York Stock Exchange.
Teetering between finance and fintech: Ant Group is aiming at evolving into a fintech company providing electronic payment services platforms.
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In June, the company switched its name to Ant Group from Ant Financial Services Group. Many analysts interpret the recent rebranding as a sign that the firm is pivoting heavily toward providing fintech service platforms to other companies.
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Ant Group, to ensure stable financial services to its 900 million users, has 6,300 full-time software engineers. The firm currently employees 10,000 workers. Leveraging the experience of providing services to nearly a billion users in China, Ant Group is seeking to sell its services platform to major financial institutions around the world.
What’s ahead?: The escalation of US-China conflict is behind Ant Group’s decision to go public in Hong Kong and Shanghai. The US Senate recently passed a legislation delisting foreign companies from US stock exchanges if their audits are not inspected by American regulators. Pentagon also listed 20 companies controlled by or actively supporting Chinese military, opening doors for the Trump administration to impose extra sanctions on the selected firms. Amid growing tensions, the road ahead does not look all bright for Ant Group.
