Ant Group’s Valuation Tops $200 Billion

Based on Ant Group’s 2020 numbers, some investors around the world have tagged the Chinese company with a valuation in excess of $200 billion, Reuters reported on Tuesday (March 16), citing sources.

When Ant’s initial public offering (IPO) last year was pulled by regulators, its valuation was a record $315 billion. The proposed dual listing in Shanghai and Hong Kong was tracking to be the world’s largest IPO. Chinese regulators halted the listing in November, subjected the company to investigations and ultimately mandated its restructuring. 

Based on 2020 earnings and comparable company analysis, U.S. private equity firm Warburg Pincus put Ant Group’s valuation at $200 billion year-end, one of the sources told Reuters. Warburg Pincus sold off some of its Ant holdings early 2020 at a $190 billion valuation in a private trade, other sources said, per Reuters.

Based on Ant’s current numbers, another investor pegged the company’s valuation roughly the same as Warburg’s estimate. Despite the probe by regulators, Ant’s October through December 2020 quarter was largely unaffected, the source told Reuters.

The Hangzhou-based FinTech, an affiliate of Alibaba, is in the midst of restructuring from a technology company to a financial services firm, which will require it to follow banking regulations. The change in structure could further erode its valuation, some analysts said, per Reuters, because tech companies are valued higher than firms in the finance sector.

The company’s IPO valuation of $315 billion was more than 31 times its 2021 anticipated net profit. The impact of the restructuring on Ant’s bottom line could put its value at its 2018 fundraising level of about $150 billion, one investor told Reuters. The company raised $14 billion at the time, a record for a single fundraise. 

Last month, Jack Ma met with Chinese regulators and agreed on a restructuring that would effectively subject it to the same regulations and capital requirements as a financial institution. Investors warned that the company’s valuation could drop to $108 billion over antitrust concerns. Other offerings from the company like food delivery and blockchain would also have to go under a separate holding company. Ant had earlier proposed that it put only financial operations into a holding company.