The worlds largest IPO is coming! Ant group: elephant on stage

 The worlds largest IPO is coming! Ant group: elephant on stage

Here comes the Big Mac ant

The corresponding valuation is over 2 trillion yuan

On the evening of October 21, China Securities Regulatory Commission approved the IPO registration of ant technology group. Subsequently, ant group issued a letter of intent, the initial inquiry time is October 23, October 29, will apply for listing on the science and technology innovation board. According to the time flow of the meeting, if it goes well, ant group is expected to land a shares before double 11.

Ant group

Ant group took a 688688 stock code, a very lucky number. Ant group is also another trump card in Ma Yuns hands after Alibaba. It itself is also born out of the Alibaba, the earliest can be traced back to the line in 2004, Alipay, and since 2011 began independent operation.

As early as 2014, Ma Yun expressed the regret that Alibaba could not be listed on the A-share market. He said that Alipay must be listed on A shares in the future. Today, the ant group, which has grown from Alipay, has become an elephant, and will soon usher in the A+H stock listing simultaneously.

Ma Yun said he wanted Alipay to be listed on A shares.

Ant group has owned Alipay, balance treasure, recruit treasure, network business bank, ant flower chant, sesame credit and other sub business segments. Most of these businesses are well known to the public, and some of them are indispensable in our daily life.

As the largest Unicorn company in the world, ant group is expected to become the largest IPO in the world. On September 21 this year, ant group raised its IPO Financing target (a + H shares) from US $30 billion to US $35 billion, and its valuation increased from US $250 billion to US $280 billion.

Ant groups $35 billion financing scale will directly break the global IPO record. Previously, Saudi Aramco ranked first in the world with a financing scale of 29 billion US dollars, and ant group will far exceed this financing scale.

According to the updated prospectus of ant group, the number of shares initially issued this time is no more than 1.671 billion shares, which is no more than 5.5% of the total share capital of the company after the issuance of a shares and H shares. Ant group A shares and H shares issued after the total share capital of 30.3 billion shares.

In the first three quarters of 2020, ant group achieved a total revenue of 118.191 billion yuan, a year-on-year increase of 42.56%, mainly from the growth of digital financial technology platform revenue; gross profit of 69.549 billion yuan, a year-on-year increase of 74.28%; and the overall gross profit rate increased from 48.13% in the same period of last year to 58.84%.

From the perspective of business scale, ant data can be described as bright and blind: Alipay has more than 1 billion active users, 711 million monthly active users, more than 8000 monthly active businesses, more than 2000 cooperative financial institutions, and 118 trillion total digital payment transactions.

Ant data is blinding

As a science and technology innovation board company, ants technology content is also in the leading position in the world: technical personnel account for 64%, covering all business lines; it has 26000 patents or patent applications in 40 countries or regions in the world; it has the first patent application in the world for four consecutive years in the field of blockchain, and the cumulative number of patents granted ranks first in the world; its database product oceanbase ranks first in the world One.

Up to now, six of the worlds top ten sovereign wealth funds have clearly planned to participate in ant group IPO projects, including Singapore Temasek, Singapore Government Investment Corporation, Abu Dhabi Investment Authority, Saudi Arabia public investment fund, CIC, China social security fund, etc.

Ant group also disclosed a number of strategic investors. Among them, Zhejiang tmall Technology Co., Ltd., a wholly-owned subsidiary of Alibaba group, will participate in the strategic placement of the IPO and subscribe for 730 million shares. In addition, 8 fund companies including e fund, huitianfu fund and Huaxia Fund have also signed share subscription agreements with strategic investors.

The listing of ant group means that A-share has finally ushered in a real world-class Internet giant, and it is likely to challenge Maotais first place in market value and break the current market pattern.

Red Star capital Bureau checked the valuation of ant group by many securities companies, and most of them concentrated in about 2 trillion yuan. Zhongtai Securities believes that ant groups valuation can refer to the domestic and foreign Internet companies and payment companies, combined with the valuation of PayPal, Tencent and other comparable companies, and combined with the proportion of financial business profits, the value of ant group is 1.8 trillion to 2.4 trillion yuan.

Guoxin Securities gave a valuation range of 1.7 trillion to 2.5 trillion yuan; Morningstar stock research valued ant group at HK $2.45 trillion, equivalent to 2.1 trillion yuan.

According to the assumption of the regulatory authorities, A-shares need a number of high-tech and Internet companies with long-term investment value, which can lead the future new economic trend and have long-term investment value. Ants are scarce and very important for A-shares which lack Internet leading enterprises. They almost meet all the expectations of a shares for top Internet technology companies.

Moreover, if ant group can surpass Maotai in Guizhou, it also means that high-tech companies will gradually replace traditional industries and become the new leaders of A-share market, which even has epoch-making significance.

At present, the A-share market value ranking is still very traditional, and there is no high-tech company in the top ten. According to the statistics of Red Star capital Bureau, the number one in the market value of a shares is still Maotai, Guizhou Province, with a total market value of 2.18 trillion yuan; the second is industrial and Commercial Bank of China, with a total market value of 1.80 trillion yuan. There are also Construction Bank, Ping An of China, China Life Insurance, Agricultural Bank of China, China Merchants Bank, Bank of China, Wuliangye and PetroChina.

In the A-share market value ranking, banking, insurance and liquor occupy the top ten list, which is in sharp contrast to the top ten in the United States. The top 10 most valuable U.S. stock market is almost dominated by high-tech companies and Internet giants, including apple, Microsoft, Amazon, Google, Facebook, TSMC, Tesla, etc., only Wal Mart and visa are relatively traditional. If the U.S. stock market value list is extended to a point, there will be NVIDIA, PayPal, Intel, adobe, Netflix and other world-famous technology companies.

So, where have Chinas Internet technology giants gone?

Alibaba, Jingdong, Netease, Baidu, Sina and pinduoduo, which we know well, went to US stocks, and the parent company of headlines today will also go to US stocks; Tencent, meituan and Xiaomi went to Hong Kong stock market, and Ali was listed in Hong Kong stock market at the end of last year.

And A-share high-quality, pure Internet technology companies, has been very scarce. At present, there are only 3600, giant network, Jinshan office, etc., or some rotten companies such as LETV and Fengfeng Group that have been or will be delisted. For many years, it is difficult for investors of a shares to enjoy the growth dividend of excellent companies such as Alibaba, Tencent and Jingdong.

A shares have been trying to reform, and the regulatory authorities are also making every effort to promote a more healthy and sustainable capital market that resonates with the economy. In July 2019, the science and technology innovation board, which implements the registration system, officially opened the door to innovative enterprises in terms of equity structure and listing guidance. It also cleared the institutional barriers for high-quality enterprises such as ant group and Jingdong Digital Technology Co., Ltd. to land on A-shares.

In order to welcome the first real world-class Internet giant in A-share market, the regulators also gave ant group a green light: it took only 57 days for Shanghai Stock Exchange to accept ant groups IPO application on August 25 and CSRCs approval for registration.

Super IPO or blood sucking effect

Ma Yun, the actual controller of ant group, holds only 8.8% shares directly. Why can it become a real controller?

As a result, the biggest winner of ant groups listing is still Ma Yun. According to conservative valuation calculation, Ma Yuns new wealth after listing will be 17 billion US dollars, more than 110 billion yuan. By then, Ma Yun, who is not interested in money, will have a substantial increase in his wealth. He will not only continue to be the richest man in China, but also likely to become the richest man in Asia.

Ant group listed will also create a large number of employees. Through the two employee stock holding platforms of Hangzhou junao and Hangzhou Junhan, the shareholding value of 30000 Ali and ant employees is estimated to be about 700 billion yuan, that is, the per capita wealth is tens of millions of yuan. Taking into account the number of senior executives, at least 60 executives are expected to become billionaires, while other ordinary employees are expected to become multimillionaires in batches.

The history of a shares also has lessons from the past. In 2007, the IPO of giant PetroChina brought significant blood sucking effect to the market. Then a shares entered a long bear market, until today, ask you how much you can worry, just like the full warehouse of PetroChina, is still a painful memory of shareholders.

After PetroChina, Pingan refinancing in 2008 and the merger and listing of CRRC in 2015, all of which brought huge shocks to the market.

Ant group after the listing of the blood effect is significant, and after the ants there are Jingdong branch, which is another big Mac. A chief analyst of a securities company, who did not want to be named, pointed out that from the current A-share market, investors worries are not unreasonable.

Ant group in the Hong Kong stock market synchronous IPO, will freeze up to several trillion Hong Kong dollars. The Hong Kong stock market is worried that too much frozen capital may have an impact on liquidity. To this end, the HKMA has taken the initiative to coordinate and communicate on the issue of capital freeze, and said that it will closely monitor the market situation to ensure the effective operation of the Hong Kong money market.

In fact, the recent market performance is low, and investors make complaints about it. On the morning of the 22nd, it was a bit frightening. Some shareholders said that they couldnt carry it. And shareholders never lack of excellent storytellers. In the face of the elephant ant group, all kinds of jokes on social platforms are also flying.

Societe Generale Securities pointed out that the impact of profit taking and risk preference after the listing of ant group may be greater, and the diversion effect of ant group on trading funds is probably higher than that of SMIC.

However, Jia Kang, chief economist of Huaxia new supply Research Institute, said publicly that the listing of ant group would not have a significant impact on market liquidity. A shares are not short of funds, but lack of quality companies. Just like the listing of ICBC more than ten years ago, the A-share market can also withstand the listing of ant group.

Red Star journalist Li Weiming

Editor Deng lingyao