Ant Financial IPO Rumored to Hit Hong Kong Exchange
Ant Financial IPO rumors surfaced back in 2018. Two years later and the rumors are back. Investors have been waiting for this Alibaba affiliate to launch shares on the public markets. But can investors expect Ant Financial stock?
Here’s what we know…
Ant Financial IPO: The Business
Jack Ma, co-founder of Alibaba Group (NYSE: BABA), founded Alipay in 2004. It was an online payment platform. In 2013, Alipay overtook PayPal as the world’s largest mobile payment platform. And the next year, in 2014, Alipay rebranded as Ant Financial Services.
Now Ant Financial offers a suite of financial services. They include mobile payments, savings accounts, personal investing, credit scoring and lending. Ant also became the most valuable investment unicorn. The company was valued at $150 billion in 2018 after a fundraising round of $14 billion in investor capital.
But analysts believe that value could go well past $200 billion after an Ant Financial IPO. And it isn’t the first time the company has looked at launching Ant Financial stock.
Ant Financial Revisits IPO Amid Growth
Ant Financial had plans to go public back in 2018. But its stock never hit the market. The company shelved the IPO due to regulatory and profitability issues. Since Ant Financial is a private company and hasn’t publicly filed, financial information is hard to find. However, we can look at what the company is doing now to see why investors might be able to expect an Ant Financial IPO.
The company benefited from a rise in mobile payments and money market funds for consumers. This trend was heavy in China, Ant Financial’s main consumer base. And with Alipay being the top mobile payment platform in the world, it makes sense that the company reflected that growth.
In addition to the growth of mobile, the company is growing in other ways. Douglas Feagin, president of the international business group at Ant Financial, said Ant Financial is expanding. It’s providing financial services to small businesses. The company also lends to consumers.
Feagin said the average loan given by Ant Financial is about $1,600. And small businesses are able to use the Alipay platform to accept payments while creating a track record for lending with Ant Financial.
The company also plans to increase its number of users to 2 billion by 2029. In November 2019, the company had more than 1.2 billion users worldwide. Feagin said:
It’s 900 million in China, 300 million outside. We see the 300 million growing dramatically outside of China. Indeed, we have an ambition of serving 2 billion consumers over the next 10 plus years and so clearly the majority of those are going to come from outside China.
He recognized Asia as a growing potential market and a focal point for Alibaba as a whole. In November 2019, Alibaba raised $12.9 billion in a secondary Hong Kong listing. The company’s stock also reacted positively on the market after reported news of an Ant Financial IPO.
But investors have long waited to get their hands on the company’s shares. So will there ever be Ant Financial stock?
When Will Ant Financial IPO?
Ant Financial hasn’t filed for an IPO. Therefore, it’s not confirmed that the fintech company is going public at all. According to Feagin, there is no “plan nor a timetable for an IPO.” But some analysts think it will happen before the end of 2020.
Investors believe Ant Financial is looking to launch its stock on the Hong Kong exchange. Some think the company should dual-list with both Hong Kong and China. Ant Financial is looking to sell between 5% and 10% ownership in the offering. It would be one of the biggest listings this year.
If Ant Financial is planning to IPO, it’s keeping it a secret. But in the financial quarter ending in September 2019, Alibaba exchanged its right to 37.5% of Ant Financial’s pre-tax profits. Instead, Alibaba now owns a 33% equity stake. Analysts say this solidifies the company’s ownership structure to clear a path for its rumored IPO.
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There is no guarantee investors can expect Ant Financial stock in 2020. But if there is an Ant Financial IPO, it will likely be a good investment opportunity.