Tagged: Alibaba

Prelude to the banquet of 2.1 trillion Wealth

In March 2012, Peng Lei was appointed CEO of Alibaba micro financial services. In October 2014, the company was named “ant financial services group”. At that time, the “little ant” of Ali Group officially appeared on the stage.
Six years later, the little ant grew into an elephant, an ant group valued at $200 billion.
On July 20, 2020, ant group officially announced that it would launch a plan to simultaneously issue shares on the sci tech Innovation Board of Shanghai Stock Exchange and the main board of Hong Kong stock exchange.
Since then, its listing process has been rapidly promoted. On August 25, the Shanghai stock exchange accepted its IPO application, and on September 18, ant group launched its IPO and successfully passed the meeting. From submitting IPO application to successfully passing the meeting, ant group only took 25 days, and the speed of its sprint to the IPO of Kechuang board set a record.
On the evening of October 26, 2020, ant group announced the pricing, and the issuing price of a shares was determined to be 68.8 yuan per share, and that of Hong Kong was determined to be HK $80.00 per share, which means that its total market value is as high as 2.1 trillion yuan.
What is the market value of 2.1 trillion yuan?
Taking the A-share market as an example, when ant group announced its pricing, the listed company with the highest market value in the A-share market was Guizhou Maotai (600519. SH), with a total market value of 2.06 trillion yuan. This means that if it can be listed successfully, ant group is expected to surpass Guizhou Maotai and become the first share in the market value of a shares.
Its rapid growth can be seen from the changes in its valuation over the past few years. In 2015, ant group had a round of financing, and its post investment valuation was about 260 billion yuan. Just five years later, its valuation has almost jumped 8 times to 2.1 trillion yuan.
Different from many science and technology enterprises that continue to burn money and are still losing money when they go public, ant group has achieved continuous profits and the annual profit scale reaches 10 billion yuan. According to the prospectus disclosed by ant group, from 2017 to 2019, ant group realized the net profit of 6.951 billion yuan, 667 million yuan and 16.957 billion yuan respectively, and the net profit growth rates in 2018 and 2019 were – 90.40% and 2442.06% respectively.
In the novel coronavirus pneumonia, the first three quarters of 2020 were even more alarming: the ant group realized a business income of 118 billion 191 million yuan in January and September, up 42.56% from the same period last year, mainly from the growth of digital financial technology platform revenue, and realized gross profit of 69 billion 549 million yuan, an increase of 74.28%; the gross gross profit margin increased from 48.13% in the same period last year to 58.84%.
Although ant group passed the meeting quickly and set the world’s largest IPO fund-raising record, and its profitability was not general, in Liu Feng’s view, the timing of its listing was not a good time. Novel coronavirus pneumonia is catching up with the US general election, this year’s new crown pneumonia epidemic and some local debt crisis.
Many industry insiders interviewed by Caijing think that the reason why ant group chose to rush for IPO this year may be driven by the original shareholders behind it.
As for the novel coronavirus pneumonia’s rush to reallocate this year, Zhang Xiaorong believes that it may come from three aspects: first, the restriction of the US dollar outflow, which makes some foreign shareholders of the ant group hope to cash in as soon as possible; two is affected by the new crown pneumonia epidemic, some shareholders are pessimistic about the future economic development expectation, hoping to bag the security before the cold winter comes, and three is to go out. He is worried about Sino US relations. Previously, foreign media reported that the US government under trump had considered listing ant group in the trade blacklist. If this measure is implemented, it will affect the valuation of ant group when it is listed.
When it comes to the original shareholders of ant group before listing, its lineup can be described as luxurious, including national social security fund, China Post Group and other “national teams”, insurance funds such as China Life Insurance and Xinhua life insurance, as well as business tycoons such as Liu Yonghao, Shi Yuzhu and Wang Zhongjun, and many shareholders have not penetrated into the underlying private equity funds.
“Ant group’s shareholders, there may be more unknown big man.” “For example, some private equity funds, whose equity penetration is relatively difficult,” said the financial professionals to “Caijing”
According to the prospectus disclosed by ant group, its shares are relatively concentrated, and the top ten shareholders hold 93.36% of the shares in total.
Among them, Hangzhou Alibaba network technology company holds 32.64%, which is the largest shareholder. Ali is a senior management and internal employee shareholding platform. Hangzhou Junhan equity investment enterprise (hereinafter referred to as “Hangzhou Junhan”) and Hangzhou junao equity investment enterprise (hereinafter referred to as “Hangzhou junao”) hold 29.8% and 20.65% respectively, which are the second and third largest shareholders of the company. Thus, Alibaba and its members hold about 83% of the shares of ant group. In addition, among the top ten shareholders, there are national social security fund, China Life Insurance, Zhifu (Shanghai) investment center, etc.
According to the reporter of Finance and economics, the current equity structure of Hangzhou Junhan and Hangzhou junao is a transitional structure, which will eventually transform into 40% of all employees including management and 60% of shares of strategic investors including Ali.
At present, Ma Yun is the actual controller of ant group. In reply to the Shanghai Stock Exchange’s inquiry letter, ant group disclosed that Ma Yun indirectly controlled 50.5% of the company’s shares through Hangzhou Junhan and Hangzhou junao, which are the actual controllers of the company. According to the relevant articles of association and agreement, Jing Xiandong, Hu Xiaoming and Jiang Fang are the persons acting in concert of Ma Yun on matters related to the resolutions of the shareholders’ meeting of Hangzhou yunplatinum.
Previously, the industry expected that the listing of ant group will bring a new round of wealth making movement, and a large number of tens of millions and even Billionaires will be born. Ma Yun, senior executives of ant group and shares held by the company