Jack Ma’s Ant Group Plans Dual IPOs in Shanghai, Hong Kong, Bypassing New York
The Chinese technology and financial-services giant’s combined offering could be one of the largest in history
HONG KONG—Ant Group Co., the Chinese technology and financial-services giant that owns popular mobile-payments network Alipay, said it is planning initial public offerings in Hong Kong and Shanghai, bypassing New York as it seeks to accelerate its growth in China and abroad.
The Hangzhou-based company, which was founded by billionaire Jack Ma and is one of the world’s most valuable startups, said it is targeting concurrent listings on China’s year-old, Nasdaq-like STAR market for homegrown technology companies and Hong Kong’s stock exchange.
Ant is moving to list closer to home while tensions flare between the U.S. and China, including threats of sanctions on Chinese officials and delisting Chinese firms from U.S. stock exchanges. Back in 2014, e-commerce giant Alibaba Group Holding Ltd. BABA 3.10% —from which Ant’s flagship Alipay business was spun out of—chose New York as its listing venue and raised $25 billion. It was the world’s largest IPO until Saudi Aramco’s listing last year.
Ant didn’t give a time frame for its IPOs or a fundraising target, but a person familiar with the matter said the company is aiming for a market valuation exceeding $200 billion and hoping to list later this year. The combined stock offering could be one of the largest in history, as companies generally sell at least 10% to 15% of their shares when they go public.
Ant was last valued at $150 billion in a private fundraising round in mid-2018 that raised around $14 billion from a combination of domestic and international investors.
Since then, several holders of Ant’s shares, including funds managed by BlackRock Inc., have marked up the value of their investments, according to regulatory filings.
Ant said going public will help it “accelerate its goal of digitizing the service industry in China,” position the company to expand with partners globally and enable it to invest further in technology and innovation.
Its executive chairman Eric Jing also said the listing would also help the development of Shanghai’s STAR market as well as the stock exchange of Hong Kong by drawing global investors to companies listed on those bourses. “We are thrilled to have the opportunity to play a part in this development,” he added.
“Ant Group is an important member of the Alibaba digital economy and we believe Ant’s listing plan will be beneficial to its future growth, creating value for its users, partners and shareholders,” Alibaba said in a statement on Monday. The company currently owns 33% of Ant’s shares.
Alipay, which grew out of a digital payments system on Alibaba’s e-commerce websites, now has more than 900 million active users in China who use its mobile app for everything from online investing to paying for groceries and utility bills.
Ant used to be known as Ant Financial Services Group before it changed its name last month. It said it wanted to be known simply as Ant Group, to reflect a shift in its strategy toward providing technology to financial institutions and other businesses.
The company also has large small-business and consumer lending units and operates a private credit-scoring business. It manages one of the world’s largest money-market mutual funds, which is sold along with dozens of other mutual funds on a popular investment platform integrated with its Alipay mobile app.
Outside of China, Ant has investments in mobile payments startups in other countries, including India’s Paytm, and payment processing tie-ups with overseas banks and retailers. Ant in 2017 tried to buy U.S. money-transfer company MoneyGram International Inc. for $1.2 billion, but the deal was scuttled by a U.S. national-security panel.
Hao Hong, a managing director and head of research at Bocom International in Hong Kong, said Ant’s plan to list in the city will make it easier for international investors to profit from selling their stakes in the company. He said Ant could fetch a higher valuation on mainland China’s A-share market, given a historical gap in valuations on stocks listed on both bourses. Virtually all IPOs on China’s fledgling STAR market, which is also known as the Science and Technology Innovation Board, have also surged upon listing.
“Now may be the best time for Ant to go public as investors’ enthusiasm has been the highest since 2015,” said Mr. Hong, adding that waiting longer could subject the company to higher geopolitical risk as tensions between the U.S. and China rise.