Alibaba's Ant Group files for mammoth dual IPO

Ant Group, the financial technology arm of Chinese e-commerce giant Alibaba Group, yesterday filed for a dual listing in Hong Kong and Shanghai, in what may be the largest share offering since the coronavirus pandemic began.

The fintech unicorn will sell at least 10 percent of its total capital post-issuance, split between Hong Kong and Shanghai’s STAR Market. China’s richest man Jack Ma will donate 611,337,334 shares of Ant Group to charitable causes, the filings showed.

While the size of the IPO is still subject to market conditions, the dual listing is widely expected to surpass Saudi Aramco’s US$29.4 billion listing last December, the record for the world’s largest fundraising.

Ant Group operates Alipay, one of China’s two dominant online payments services. Over a billion users use Alipay for purchases both online and in stores, to send money to friends and to pay bills. In the 12 months to end-June, Ant tallied 118 trillion yuan (US$17 trillion) in transaction volume.

First-half revenue rose 38 percent to 72.5 billion yuan, from 52.5 billion yuan a year earlier, giving the company 24.4 billion yuan in pre-tax profit, an eightfold jump year on year.

More than half its 2019 revenue came from financial services such as lending, wealth management and insurance offered through Alipay. Fees from processing payments and serving merchants accounted for almost all of the rest.

It also noted that the platform had enabled US$290 billion in credit to individuals and small businesses, as well as US$500 billion in investments.

In the filing, Ant said it plans to use the funds from the listing to expand its services, invest in research and development, and to expand its payments business internationally.

Ant Group was valued at US$150 billion in a private fundraising round in 2018, making it the most valuable startup in the world.

The company also runs one of the world’s largest money market funds as well as Zhima Credit, a private credit rating system for its users.

Alibaba listed in the US in 2014. But last year raised billions more in a second listing in Hong Kong.

Last month Alibaba’s Chinese rival JD.com raised almost US$4 billion in an IPO in Hong Kong that was the world’s second-biggest of the year.

Tech analysts say Ant Group controls more than half of China’s huge mobile-payments sector, which it fiercely contests with Chinese rival Tencent.

Ant — spun off from Alibaba years ago — has expanded recently into lending, wealth management, travel and a range of other services, and this year changed its name to Ant Group from Ant Financial Services Group to reflect its expanded portfolio.

Ant said the listings will allow it to help drive domestic Chinese consumer demand and “position the company to develop global markets.”