Billionaire Jack Ma’s Ant Group filed for a dual listing on the Hong Kong stock exchange and Shanghai’s tech-focused Star board to finance its growth in financial services and cement its position as one of the largest FinTech platforms in China.
The Hangzhou-based firm could raise as much as $30 billion (Dh110.1bn). If successful, that would be the world's biggest initial public offering following Saudi Aramco's $29.4bn listing in last December.
The company did not disclose the size or timeline for the IPO in a preliminary prospectus released on Tuesday.
Ant Group is the world's biggest FinTech with service offerings in everything from consumer and SMB credit to investments and insurance. The company has also broadened its offer to include services such as travel and food delivery.
Ant Group started life as a payments arm of Mr Ma's ecommerce site Alibaba in 2004 but was spun out as a separate entity in 2011. Alibaba Group is still a significant shareholder, with a 33 per cent stake.
In the first half of this year, the company earned 72.5bn Chinese yuan ($10.5bn / Dh38.5bn) in revenue, an increase of 38 per cent on the same period last year, according to its filing.
Its profit during the period was 21.9bn yuan, exceeding 2019’s full-year total of 18.1bn yuan.
The company has more than one billion active users of its Alipay app, with over 80 million merchants accepting payments. It has agreements with more than 2,000 financial institutions and its investment arm has 4.1 trillion yuan of assets under management, the filing said.
However, it also warned of several regulator and other risks, including that regulations could increase its compliance burden, costs and restrict the flexibility of its operations.
“As such, our business model and these financial institutions … are subject to evolving and extensive regulation … these laws are highly complex, continuously evolving and could change or be reinterpreted to be burdensome or difficult to comply with,” the prospectus said.
“We cannot assure you that we will be able to make adjustments to our business in the future in a timely manner to respond to such additional scrutiny and requirements,” it added.
US-China trade woes could also affect its “cross-border payments business”, the company said.
Geopolitical tensions have led to a worsening relationship between China and the US and this adverse trend may continue to deteriorate, which could negatively affect the business, it said.
It also warned of the risk of "significant competition" as it enters other markets.
The company said it plans to use future proceeds to "further pursue our vision to digitalise the service industry", to invest in R&D and to expand its cross-border payments and merchant services businesses. It also intends to use a portion for general working capital, it said in the filing.
