Ant Group, Alibaba’s fintech affiliate, has started the paperwork for concurrent listings on Shanghai’s Nasdaq-style STAR Market and the Hong Kong Stock Exchange, the company announced on Monday.
Why it matters: Ant Group is reportedly targeting a $200 billion valuation in one of this year’s biggest IPOs.
- If Ant Group reaches such a market capitalization, it will be the world’s most valuable fintech company.
- Reaching a $200 billion valuation would also mean that Ant Group’s market cap is higher than that of most of the world’s banks, including state-owned Bank of China and China Construction Bank.
- While secondary listings have been popular among China’s tech giants in the last year, this is the first time a privately-held Chinese company has attempted to list simultaneously on two stock exchanges.
Details: Ant Group, which operates Alipay, China’s most popular mobile payments app, hinted that it wants to be more than a fintech company in a press release announcing the listings.
- The company aims to build “the infrastructure and platform to support the digital transformation of the service industry,” according to the announcement.
- Ant Group will use the funds from its IPOs to further its digitization of services in China, expand into global markets, and invest in research and development, the company said.
- “Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders, and regulators,” Ant Group Executive Chairman Chen Jing said in a press release.
Context: In its last round of private fundraising in June 2018, Ant Group’s valuation climbed to $150 billion according to analysts.
- Bank of America values Ant Group at $210 billion, while JPMorgan estimates the company’s valuation to be $218 billion, the South China Morning Post reported.
- In early 2020, Ant Group was reportedly looking to raise $200 billion through private sales of shares. The company denied any plans for an IPO at the time.
- In early July, Reuters reported that Ant Group had given up plans for the two concurrent IPOs. The company planned to list only in Hong Kong because of “a smoother listing process,” Reuters said citing people familiar with the matter.
- Many of China’s US-listed tech companies, including Alibaba, have announced secondary listings in Hong Kong in the past year as they look to tap Asian capital markets.
- On July 16, the Semiconductor Manufacturing International Corporation, a Chinese chip manufacturer, had one of the biggest IPOs in China’s history. Shares in its secondary IPO on Shanghai’s STAR Market surged 200%, while its stock price in Hong Kong fell by 17% on the same day.
- Ant Group’s announcement is a big win for Shanghai’s new tech board, which aims to bring homegrown companies back to Chinese stock exchanges.