A financial poisonous Ant?

The second hurdle is finance. Ali must change his genes to pass.

2020 is another critical year for Ali. The epidemic is good for the Internet, but the policy is not. Time changes, Ali cannot be as bullish as in 2015.

Looking at the search index, you will know that even the media that Ali has voted for are neutral articles, and even broke Ali’s anise. Similar to the fact that the private life of the former Ali prince Jiang Fan was completely blocked, it will never happen again.

At every critical moment, there must be a class action lawsuit in the United States.

In the last war, investors accused Alibaba of failing to disclose matters that had been warned by the State Administration for Industry and Commerce before listing, and eventually paid 250 million US dollars to reach a settlement. This time, because the Ant Group suspended its listing, American investors in Ali became angry. It is estimated that some people rushed to the vegetable field with their sickles. Unexpectedly, they disappeared, emotionally and profitably.

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On November 13, Alibaba US stock investors filed a lawsuit in a New York court, accusing the company and its executives of making material false or misleading statements during the IPO process of Ant Group.

Now the key is not whether Ant can be listed, but the financial model of Ant is unsustainable and revenue will drop sharply.

The suspension button of Ant Group’s listing was pressed, and the Banking and Insurance Regulatory Commission of the People’s Bank of China issued the “Interim Measures for the Management of Online Small Loans (Draft for Comment)”.

Originally, people were eating hot pot and singing. Now, the hot pot is taken away, and the person who eats the pot looks blank.

This scene is frozen in history.

Ant’s original small loan model must, must and will definitely change. The leverage is too high, too big to fail, too risky, and unfair competition with other financial institutions.

Mr. Huang Qifan facilitated the cooperation with Jack Ma when he was in Chongqing. He knew ants.

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Huang Qifan said: “Ma Yun spent hundreds of billions of dollars and borrowed them. Where did the money come from? First bank loans and then ABS. Huabei and borrowed more than 3 billion capital funds reached more than 300 billion, a 100 times magnification.”

“This 100 times loan is okay. His more than 3 billion loans were loaned at a ratio of 1:2, and the bank gave him 5 or 6 billion loans, forming about 9 billion. Then he went to the capital market to engage in ABS, because we The conventional capital market does not stipulate the number of cycles for issuing ABS. For a conventional small financial institution, if a loan of 1 billion is issued, it may take a year to issue ABS with a loan of 1 billion. Years have passed, and the first round of assets has long been recovered.”

The whole process is not illegal.

At that time, Huang Qifan’s five requirements to Ma Yun were:
First, the source of capital must be capital injection from the parent group, not from netizens like P2P;
Second, the money of small loan companies should be loaned to the customer chain, not to unrelated netizens;
Third, loan funds must be borrowed and financed at 2.3 times as required by the China Banking Regulatory Commission;
Fourth, the source of subsequent loan funds can be through compliant ABS financing;
Fifth, the business can radiate to the whole country, but the headquarters must be registered in Chongqing.

These five items have delayed the thunder explosion for Xiaodai, or even no thunder explosion.

In order to control risks, the central bank has decided that ABS can only be cycled 5 times at most. In fact, it is mainly determined by each locality. In 2012, Chongqing stipulated that the scale of microfinance operations was up to 2.3 times larger.

The 2017 new regulations have two restrictions that have the greatest impact on ABS: ABS will no longer be listed and included in the on-balance sheet supervision; ABS financing will be included in the leveraged operation ratio.

The new ABS regulations are not fatal to ant small loans, there are many smart people, and the problem is easy to solve.

Huang Qifan explained the workaround, increasing the funds of Ant Small Microfinance Company and Ant Merchant Credit Company from 3 billion to more than 10 billion. Through bank loans, it can still obtain more than 50 billion of funds, and then pass up to 5 rounds of ABS. , Can also get 300 billion funds.

Under the new regulations on cash loans, Ants consciously reduced the scale of ABS. Data from the Shanghai Stock Exchange’s debt information platform show that since the end of 2017, the issuance scale of the Ant ABS project has dropped from 30 billion yuan to 10 billion yuan.

The scale has declined, and the operation continues. On November 24, the Shanghai Stock Exchange’s debt project information platform showed that two ABS projects under Ant’s display status were approved.

However, these methods cannot solve the problem of joint loans with banks. The bank follows the ants and provides money to the ants, and everyone who has money makes it together.

On November 2, the China Banking and Insurance Regulatory Commission promulgated new regulations on online loans. The balance of microfinance companies operating online microfinance business through bank loans, shareholder loans and other non-standard financing forms shall not exceed 1 times their net assets; The balance of funds deposited through the issuance of bonds, asset securitization products and other standardized forms of debt assets shall not exceed 4 times its net assets. In a single joint loan, the proportion of capital contribution of a small loan company operating online small loan business shall not be less than 30%.

This puts Ali facing huge financial pressure.

“China Fund News” reported that on the basis of 1.8 trillion joint loans, Ant Group’s corresponding on-balance sheet loan balance is at least 540 billion yuan, much higher than the current 36.2 billion yuan on-balance sheet loan balance. According to the principle of up to 5 times the leverage of small loan companies’ on-balance sheet loans, and including other current on-balance sheet assets, Ant’s small loan companies’ capital needs to be expanded to 140 billion yuan, which is much higher than the current Huabei and Bibai companies. The total registered capital is 35.8 billion yuan.

Ant’s joint loan requires supplementary funds. The source of funds can be ABS, or shareholders’ capital increase or the introduction of strategic investment.

Ant’s funds collapsed.

Immediately, Ali ABS interest rates rose immediately.

Ants may think that they are just an intermediary agency, but the parties do not recognize it. Some people believe that ants are essentially highly leveraged finance. If they continue to develop in this way, they will become a poisonous ant. In the end, risk spreads until it becomes uncontrollable. Excessive use of leverage will make ants become a financial perpetual motion machine.

On December 8, 2020, Mr. Guo Shuqing delivered a speech at the Singapore Fintech Festival.

Guo Shuqing affirmed the rapid progress of financial technology, but mainly pointed out that the financial technology industry has the characteristics of “winner takes all”. Large technology companies often use data monopoly advantages to hinder fair competition and obtain excess returns. Traditional antitrust laws cannot rule these companies. .

These new types of “big to fail” are risky. They dominate the payment market, master data, and have the characteristics of infrastructure. These infrastructures involve public interest and should belong to the government.

It seems that the time has come to fulfill the handover promise. Soon, the infrastructure and basic data will be handed in, and capital must be added.

Ants fold their feet and may trip over elephants.

Mr. Guo Shuqing deserves our focus.

article links:A financial poisonous Ant?

Reprint indicated source:Spark Global Limited information


1 Response

  1. Emerson says:

    When we see Ant becoming the envy of the world, we should think again about how to understand finance, especially the inclusive nature of finance.

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