• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • Articles
  • News
  • Events
  • Advertize
  • Jobs
  • Courses
  • Contact
  • (0)
  • LoginRegister
    • Facebook
    • LinkedIn
    • RSS
      Articles
      News
      Events
      Job Posts
    • Twitter
Datafloq

Datafloq

Data and Technology Insights

  • Categories
    • Big Data
    • Blockchain
    • Cloud
    • Internet Of Things
    • Metaverse
    • Robotics
    • Cybersecurity
    • Startups
    • Strategy
    • Technical
  • Big Data
  • Blockchain
  • Cloud
  • Metaverse
  • Internet Of Things
  • Robotics
  • Cybersecurity
  • Startups
  • Strategy
  • Technical

Explainer: What’s next for Jack Ma’s Ant Group after China orders revamp?

Reuters / 3 min read.
April 19, 2021
floq.to/lUEA2

By Kane Wu

HONG KONG (Reuters) – China has imposed a sweeping restructuring plan on Jack Ma’s Ant Group, the fintech conglomerate whose record $37 billion IPO was derailed by regulators in November, that will see the group become a financial holdings company among other things.

Ant, valued at around $315 billion at its IPO pricing, is also exploring options for founder Ma to divest his stake and give up control, as meetings with regulators signalled the move could help draw a line under Beijing’s scrutiny of its business, Reuters exclusively reported on Saturday.

Here is a look at what the company needs to do in the near-to-medium term as a result of the revamp:

HOW MUCH EXTRA CAPITAL DOES ANT NEED?

New regulation requires fintech platforms to own 30% of all the loans that they co-lend with banks.

Brokerage Jefferies estimated in a report last week that Ant will need 13.4-20.1 billion yuan ($2-$3 billion) of capital to meet the minimum capital adequacy ratio for consumer finance companies. A third to half of Ant’s 1.7 trillion yuan consumer loans are in the co-lending model, Jefferies estimates.

HOW WILL ANT RAISE CAPITAL?

It will be tough for Ant to inject more capital into its consumer finance company of which it owns only 50%, brokerage Macquarie has said.

Also, then Ant will have to convince other shareholders to come up with more capital to maintain shareholding percentages, said a Hong Kong-based analyst with a U.S asset manager which had subscribed to Ant’s halted IPO.

If that is not possible, any potential shareholding change will require negotiations on the company’s valuation which Ant might not want to get to, the analyst added.

One Ant investor, however, told Reuters that the potential capital shortfall would be well within Ant’s means and that it would not need to raise more money from outside investors.

Ant declined to comment.

The analyst and the investor spoke on condition of anonymity as they were not authorised to speak to media.

HOW WILL ANT’S VALUATION CHANGE AFTER THE RESTRUCTURING?

It is too early for analysts to come up with a new valuation estimate based on Ant’s revamp plan as more details are needed.

Some investors told Reuters they are optimistic that Ant will not be valued as cheaply as a Chinese bank, given the scope of its business and the technology and data power it possesses in the world’s second-largest economy.

Major lenders in China’s main banks stock index trade at 5-12 times forward earnings and 0.4-1.7 times their forward book value, Eikon data shows. Ant would be worth $33 billion if priced at one time book value based on its net assets reported last year, according to Reuters Breakingviews calculations.

Some global investors valued Ant at over $200 billion based on its 2020 performance, Reuters has reported.

WHAT HAPPENS TO ANT’S PAYMENT BUSINESS?

It is unclear how Ant is going to break up its payment business from its credit products Jiebei and Huabei.

Jiebei and Huabei are currently embedded within Alipay and rely on the mobile payment app for user traffic.

Any de-link would reduce users of the credit products and potentially affect Ant’s loan quality if data access to Alipay would somehow be limited or affected, the Hong Kong-based analyst said.

WHAT ELSE WILL CHANGE AS PART OF THE RESTRUCTURING?

Ant has said it will set up a personal credit reporting company and apply for a personal credit reporting license.

It is already a shareholder in Baihang Credit, one of the only two credit agencies licensed by the central bank.

Macquarie analysts believe the People’s Bank of China may not grant Ant a license for its own credit company, while Jefferies said Ant may have to partner with a state-owned company to set up the agency.

(Reporting by Kane Wu; Editing by Sumeet Chatterjee and Himani Sarkar)

Categories: News
Tags: Data, mobile, quality, share, technology

About Reuters

Primary Sidebar

E-mail Newsletter

Sign up to receive email updates daily and to hear what's going on with us!

Publish
AN Article
Submit
a press release
List
AN Event
Create
A Job Post

Jobs

  • Software Engineer | South Yorkshire, GB - February 07, 2023
  • Software Engineer with C# .net Investment House | London, GB - February 07, 2023
  • Senior Java Developer | London, GB - February 07, 2023
  • Software Engineer – Growing Digital Media Company | London, GB - February 07, 2023
  • LBG Returners – Senior Data Analyst | Chester Moor, GB - February 07, 2023
More Jobs
Host your website with Managed WordPress for $1.00/mo with GoDaddy!

Tags

AI Amazon analysis analytics app application Artificial Intelligence BI Big Data business China Cloud Companies company costs crypto customers Data design development digital environment experience future Google+ government information learning machine learning market mobile Musk news Other public research sales security share social social media software strategy technology twitter

News

  • Thomson Reuters AI copyright dispute must go to trial, judge says
  • Mexico eyes US energy exports from solar farm, chip supply chain role
  • Chipmaker GlobalFoundries seeks funding under CHIPS Act
  • Yelp wants Google’s lawyers tossed from US antitrust case
  • CEO of Bezos’s Blue Origin to step down by year’s end ‘sources
More News

Related Online Courses

  • Oracle Cloud Data Management Foundations Workshop
  • Data Science at Scale
  • Statistics with Python
More courses

Footer


Datafloq is the one-stop source for big data, blockchain and artificial intelligence. We offer information, insights and opportunities to drive innovation with emerging technologies.

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Recent

  • 5 Reasons Why Modern Data Integration Gives You a Competitive Advantage
  • 5 Most Common Database Structures for Small Businesses
  • 6 Ways to Reduce IT Costs Through Observability
  • How is Big Data Analytics Used in Business? These 5 Use Cases Share Valuable Insights
  • How Realistic Are Self-Driving Cars?

Search

Tags

AI Amazon analysis analytics app application Artificial Intelligence BI Big Data business China Cloud Companies company costs crypto customers Data design development digital environment experience future Google+ government information learning machine learning market mobile Musk news Other public research sales security share social social media software strategy technology twitter

Copyright © 2023 Datafloq
HTML Sitemap| Privacy| Terms| Cookies

  • Facebook
  • Twitter
  • LinkedIn
  • WhatsApp

In order to optimize the website and to continuously improve Datafloq, we use cookies. For more information click here.

Dear visitor,
Thank you for visiting Datafloq. If you find our content interesting, please subscribe to our weekly newsletter:

Did you know that you can publish job posts for free on Datafloq? You can start immediately and find the best candidates for free! Click here to get started.

Not Now Subscribe

Thanks for visiting Datafloq
If you enjoyed our content on emerging technologies, why not subscribe to our weekly newsletter to receive the latest news straight into your mailbox?

Subscribe

No thanks

Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

Marketing cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

Please enable Strictly Necessary Cookies first so that we can save your preferences!