Ant, a fintech pioneer that once dominated online spheres from mobile payments to money management, has lost much of its value since regulators scrapped what would have been a record IPO at the eleventh hour in 2020. Singapore’s state investment firm, for one, seeks a better understanding of how Ant arrived at its repurchase valuation of about 567.1 billion yuan (US$78.9 billion or $104.9 billion). That’s almost 70% lower than an estimated US$280 billion market capitalization in 2020.
Chinese regulators are wrapping up a two-year crackdown on the country’s once-freewheeling technology giants after slapping more than US$1 billion of fines on Ant and Tencent Holdings Ltd. in July. Ant has completed its overhaul ordered by Beijing, though that pinched profitability and sapped growth at a sprawling platform that spanned lending and insurance to asset management.
Ant’s Alipay remains a central payment method on Alibaba’s Taobao and Tmall online shopping platforms, and a key customer of its US$11 billion cloud business. The company is seeking to shore up the bottom line of its six main divisions, which are set to split six ways to create several independent corporations, most of which can then pursue their own funding and eventual market debuts.
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“Given that Ant Group continues to be an important strategic partner to Alibaba Group’s various businesses, Alibaba Group has decided that it will not sell any shares to Ant Group under the proposed share repurchase, so as to maintain its shareholding in Ant Group,” the company said in its brief filing.
