KEY POINTS
- Ant Group, which is still controlled by Alibaba founder Jack Ma, reported a more than 1,000% jump in profits in the first half of 2020 from the same period last year.
- The company is planning a concurrent listing on the Hong Kong stock exchange and the Shanghai stock exchange’s STAR market.
- Ant said that geopolitical tensions between the United States and China could “negatively affect” its business.
Ant Group, an affiliate of Alibaba, has given the first take a look at its financials ahead of its highly-anticipated going public (IPO), in a file filed on Tuesday.
The financial innovation powerhouse, which is still managed by Alibaba creator Jack Ma, reported revenue of 21.9 billion Chinese yuan ($ 3.2 billion) on overall revenues of 72.5 billion yuan in the very first half of the year, according to the exchange filing.
That represented a more than 1,000% jump in profits from the very same duration a year earlier when the company generated 1.9 billion yuan. Revenues were also up considerably, climbing up about 38% from the 52.5 billion yuan the firm made in the first half of 2019.
Ant Group, formerly known as Ant Financial, is preparing a concurrent listing on the Hong Kong stock market and the Shanghai stock exchange’s STAR market, which is a Nasdaq-style tech board.
The company has not yet divulged information about the pricing of its shares. But one analyst formerly informed that its market appraisal could be north of $200 billion, making it bigger than a few of America’s most significant banks.
Ant Group runs the wildly popular Alipay mobile payments app in China which, according to the business’s filing Tuesday, has more than 1 billion yearly active users and processed 118 trillion yuan in transactions in mainland China in the 12 months ended June 30. The platform also has a worldwide existence, with a yearly deal volume of 622 billion in markets outside China.
But the business also provides monetary items beyond that, including wealth management, loans to organizations, and insurance coverage. More recently, Ant has pivoted to concentrate on what it calls innovation services — monetary technology items that it can sell to enterprise consumers for a cost.
Threats
Ant said that geopolitical tensions between the United States and China might “negatively affect” its organization. The world’s 2 largest economies have long been engaged in conflicts over trade and technology, the most current of which have included the popular Chinese-owned social networks app TikTok.
TikTok, owned by Beijing-based web giant ByteDance, was the target of an executive order looking to prohibit the business’s American operations due to nationwide security issues. TikTok has rebuffed the order and recently filed a lawsuit against the U.S. federal government challenging the ban.
Another executive order centers on WeChat, the messaging app owned by Tencent. Tencent stated in its most current quarterly profits call that it is “looking for even more explanation” on the order.
Such restrictions “might materially and adversely impact our ability to obtain or use technologies, systems, devices or parts that might be critical to our innovation infrastructure, service offerings, and company operations; to gain access to U.S. cloud-based systems and other infrastructure; and to run in the U.S.,” Ant said in the filing Tuesday.
“In addition, these policies and measures directed at China and Chinese business could have the effect of dissuading U.S. persons to work for Chinese companies, which could impede our capability to work with or maintain certified workers to work for our company,” the company included.