China’s Ant Group: the Biggest IPO on Earth

By Shuyao Kong

Ant Group, the Fintech arm of China’s e-commerce giant Alibaba, filed for a dual listing in Hong Kong and Shanghai today. The initial public offering (IPO) for the company, which is looking for a $225 billion valuation, is expected to be the world’s biggest ever.

Ant Group’s flagship product, Alipay, fuels Chinese digital life by facilitating services such as payments, ride-hailing, wealth management, mobile food orders, and travel bookings.

Ant Group, owned by billionaire Jack Ma, is also at the forefront of China’s blockchain efforts. The company has been collecting patents at an astonishing pace for the past four years. It has also released its own blockchain—AntChain—hoping to get in on the action. Because its services are deeply embedded in Chinese daily life, Ant Group has the natural advantage of having in-built users (and, more importantly, use cases) for its blockchain experiments.

Other than the size of its offering, Ant Group’s choice to skip New York in favor of Hong Kong and Shanghai is significant. On the one hand, it could be perceived as a maturation of the Chinese markets and show that China can stand alone as a capital market. On the other hand, it shows the growing division between China and the US, as tech companies such as Tik Tok and WeChat become mired in larger geopolitical debates.

Rather than choosing to be listed on the Shanghai stock exchange completely, Ant Group chose both Shanghai and Hong Kong. Some China watchers say this shows that Hong Kong has not yet been abandoned by the Chinese government; to the contrary, it still serves as the financial hub for China.

Ant Group’s success is formidable. Reports showed that for the first half of 2020, it generated revenue of $10.5 billion, netting a profit of $3.1 billion.

Ant’s IPO has minted a new generation of millionaires who have achieved financial freedom, a status that’s wildly celebrated by Chinese media and netizens. Thus far, media attention has focused less on the geopolitical division, but more on the amount of wealth generated from the IPO. Indeed, many have begun to wonder which Chinese company will be the next to conduct an IPO on these exchanges.

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