One of the most expected IPOs of this year is about to happen. Jack Ma's company – Ant Group – is expected to complete the largest public offering, topping Aramco’s 2019 listing. But before everything happens, let's find out some things about Ant Group.
Ant Group formerly known as Ant Financial, is an affiliate company of Alibaba Group which managed to attract roughly 450 million active users or almost 58% of the online payment transactions made in China.
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The leading service that Ant Group provides is mobile and online payment through Alipay.
Alipay was initially created as an escrow service for Alibaba to allow secure transactions on the website, gaining 711 million active users who are mostly based in China. In just one year, it generated $17 trillion in payments.
Huabei & Jiebei or Just Spend and Just Lend, have been created to help people who don't have liquid cash spend through Alipay. The company acts as a gateway, directing large amounts of cash flows, especially from banks. In just a year, 500 million people made loans through the platform.
Of course, like any other successful company, Ant Group was looking to expand internationally. In January 2017 the company announced that it is looking to pay $880 million to purchase MoneyGram International. But the deal didn't go through as it didn't receive approval from the Committee on Foreign Investment in the US due to national security concerns.
Ant Fortune & Yu'e Bao Money Market Fund were launched in 2013 and 2015 with the purpose of offering various products from over 80 Chinese fund institutions. Since 2017, financial institutions can publish content and sell their financial products using the platform.
Because innovation is what's driving Ant Group, they partnered up with Vanguard Group earlier this year. The partnership allows the US giant to pave its way into the Chinese financial sector.
Zhima Credit was created in 2015 as a service designed to run checks on transaction histories and uses data from third-party providers to see people's creditworthiness. If customers score high enough, they don't have to pay deposits on a lot of services. These can vary from renting a bike to booking a room at a costly hotel.
Xianghubao came to life in 2019, allowing people to pay a small fee every month for the health insurance of people needing treatments for illnesses like cancer, Alzheimer's, and Ebola.
When adding numbers, all these services have proven profitable. Last year, Ant's revenue came in at $17 billion, 40% higher than the figures posted in 2018. More than 50% of the revenue was generated by their first three services mentioned above.
For the first half of the year, Ant Group had revenues of $10.5 billion. The figures came in 38% higher than during the same period last year.
Ant Group is on its way to the largest public offering since Saudi’s Aramco hit the market. The Chinese conglomerate is looking to raise $34.5 billion on its initial public offering.
If everything goes smoothly, Ant Group's valuation will reach $313.37 billion, topping some of the largest American banks such as Goldman Sachs and Wells Fargo.
Ant is scheduled to set the price for its Hong Kong listing on Friday, according to people familiar with the situation.
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Sources: cnbc.com, thestreet.com, asia.nikkei.com