Chinese fintech giant Ant Group — formerly Ant Financial — operates Alipay, the world’s largest digital payments platform. As it attempts to go public in one of the world’s largest IPOs, here’s what US investors need to know about how they can buy in.
Latest updates
Tuesday, April 13: Ant Group plans to apply to become a financial holding company to fall in line with regulatory restrictions from China’s central bank, reports The Wall Street Journal. Wednesday, March 3: Ant Group’s executive chairman, Eric Jing, announced that the company is looking for ways to carry out its originally planned $37 billion initial public offering while complying with Chinese regulators who put the kibosh on the deal. Jing reportedly said that Ant Group is looking for a liquidity solution for employees to monetize shares after the IPO’s cancellation. Wednesday, January 20: Jack Ma, Ant Group’s co-founder, resurfaced in an online video praising China’s teachers. This is the first time Ma has been seen publicly since he criticized China’s regulatory system in October 2020. His physical whereabouts, however, have not been disclosed. Wednesday, January 6: President Donald Trump signed an executive order prohibiting transactions with companies behind eight Chinese apps, including Ant Group’s Alipay. Tuesday, January 5: Ant Group’s co-founder, Jack Ma, has reportedly not been seen in public since an October 2020 forum where he was a speaker. Some sources have speculated that Ma has been missing since Chinese regulators summoned him and two Ant Group executives for an interview in November. Other sources suggest Ma has simply been lying low in the wake of this interview. Monday, November 30: Due to regulatory changes in China, the Ant Group IPO might be delayed into 2022, Bloomberg reported. Thursday, November 12: The Wall Street Journal reports that China’s President Xi Jinping personally blocked Ant Group’s IPO. Tuesday, November 3: The Shanghai Stock Exchange suspends Ant Group’s IPO just days ahead of its November 5 release. Ant Group elects to hold off on its Hong Kong release until it can resolve its regulatory issues.
What we know about the Ant Financial IPO
Hangzhou-headquartered Ant Group planned to go public through a parallel listing on the Hong Kong and Shanghai stock exchanges. This Alibaba affiliate intended to raise as much as $34.5 billion through its dual-listing. If successful, the listing would break world records for the largest IPO to date. It was the first time a listing of its size was priced outside New York City.
Ant Group planned to evenly split its offerings between the two exchanges, with up to 1.67 billion shares up for grabs on each exchange, accounting for 11% of total outstanding shares. The New York Times suggests Ant Group could be worth as much as $310 billion. This valuation puts it on par with JPMorgan Chase — not only the biggest bank in the US but one of the largest financial institutions in the world.
The projected price for Ant Group’s Shanghai stock is 68.8 yuan, or $10.26, while its Hong Kong stock is expected to launch at 80 Hong Kong dollars, or $10.32. Shares were expected to go live on their respective exchanges on November 5, but the listing has since been canceled.
In the days leading up to its release, institutional investors vying for a slice of Ant Group were bidding as high as 120 Hong Kong dollars, or $15.50, per share in gray-market trading. This constitutes a 50% premium on the listing price and served as an indication of how high the demand was for Ant Group shares.
China suspends Ant Group’s listing
On November 2, Jack Ma, Ant Group’s billionaire co-founder, was asked to attend a meeting with the China Securities Regulatory Commission and the State Administration of Foreign Exchange. While the exact details of the meeting remain under wraps, multiple reports suggest that the meeting was called to serve Ant Group a regulatory warning. Ma was informed that Ant Group would need to face greater scrutiny and restrictions on its capital — similar to those imposed on other financial institutions.
On November 3, the Shanghai Stock Exchange announced that it plans to suspend Ant Group’s IPO on its exchange, just days ahead of its November 5 release — a crippling blow for what was to be the world’s biggest IPO. Following its Shanghai suspension, Ant Group elected to hold off on its Hong Kong release until it could resolve its regulatory issues.
While it’s still not entirely clear why Ant Group’s Shanghai listing was suspended, The Wall Street Journal reported on Nov 12 that China’s President Xi Jinping was personally responsible for Ant Group’s IPO suspension — potentially in response to Jack Ma’s open criticism of the country’s slow and risk-averse banking industry just weeks prior. Analysts also suggest the regulatory move was a response to Ma’s push for Ant Group to be treated as a tech company instead of a financial institution.
To amend its listing, Ant Group needs to resolve its regulatory issues and meet listing conditions for information disclosure requirements.
Following the IPO’s suspension, Alibaba — which holds 33% of Ant Group — saw its Hong Kong and NYSE shares drop by 7% and 8%, respectively.
Ant Group has apologized to investors and pledges to refund the money it has collected. Analysts believe the delay may slash Ant Group’s value by up to $140 billion.
We’ll update this page as more information becomes available.
Is Ant Group still going public?
Will Ant Group take another shot at a public listing? The company hasn’t made any official statements — yet. But reports suggest a new IPO prospectus must be drawn and submitted — a process that could delay the company’s dual-listing by at least six months.
How to invest in Ant Group from the US
Although Ant Group’s stock will only be available on Chinese exchanges, US investors can still buy shares. In fact, there are four ways American investors can invest in Ant Group.
Watch our short video in which we break down what we know so far about Ant Group’s upcoming IPO and how you may be able to buy shares from the US.
1. Use an international brokerage account
Most US brokerages only offer access to US stock exchanges, like the NYSE and Nasdaq. If you plan to buy Ant Group shares, you’ll need an international brokerage account that allows you to buy and sell shares on overseas markets.
Charles Schwab, Fidelity and Interactive Brokers are all equipped to handle international trade. But before you open an account, make sure you review your broker’s commissions, exchange rates and potential taxes.
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Another option for investors who want to purchase Ant Group stocks is to back its parent company, Alibaba. While this is a less direct investment than purchasing Ant Group stocks outright, you won’t need an international brokerage account to invest — Alibaba trades on the New York Stock Exchange under the ticker symbol BABA.
You can also indirectly add Ant Group stocks to your portfolio by investing in exchange-traded funds (ETFs) that track the stock. Once the stock hits the market, keep an eye out for ETFs that add Ant shares to their overall holdings. By purchasing these ETFs, you’ll gain some exposure to Ant Group’s stock.
The following ETFs already invest heavily in Chinese stocks, so they may be worth watching once Ant shares go live:
iShares MSCI China ETF
KraneShares CSI China Internet ETF
Renaissance Capital’s International IPO ETF
SPDR S&P China ETF
You can buy ETFs or ADRs from a domestic brokerage account.
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4. Wait for an ADR
A final option for investors looking to tuck a slice of this Chinese fintech into their portfolio is to wait for the company’s American Depositary Receipt (ADR) to reach US markets. ADRs are certificates that represent shares of foreign stock, and like ETFs, they can be purchased from a domestic brokerage account.
Should Ant Group’s ADR be released to US investors, it may arrive as a Level 1, Level 2 or Level 3 ADR. Level 1 ADRs are the most risky, as they don’t require an SEC report and typically only trade on over-the-counter exchanges. Level 2 and 3 ADRs must file SEC reports, with only Level 3 ADRs being allowed to list on major US markets.
Ant Financial’s balance sheet
Ant Group is a subsidiary of Alibaba Group and was formed in 2014 to manage Alipay — a digital payments platform with over 711 million active users.
For the six months that ended in June 2020, Ant reported revenue of 72.5 billion yuan — or $10.5 billion. Profits over the same period were 21.9 billion yuan — or $3.2 billion. These figures put Ant Group’s revenue up 38% from the same period in 2019 — a promising trend for interested investors.
Ant reports that its payment app, Alipay, processed 118 trillion yuan — $17 trillion — in transactions for the 12 months ended in June 2020.
How are similar companies performing?
While there is no guarantee of performance, here’s how some of Ant Group’s competitors have fared:
See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.
Company summary
Lakala Payment Co., Ltd. provides third-party payment and cross-border payment services in China. The company offers payment collection, money management, store management, and supply chain management services. It services retail store, industrial, small and medium banks, and cross-border e-commerce sectors. Lakala Payment Co., Ltd. was founded in 2005 and is based in Beijing, China.
Historical performance
Stock information
Market capitalization: $15656390656
P/E ratio: 43.4889
Dividend yield: 0.0462%
Company summary
MoneyGram International, Inc., together with its subsidiaries, provides cross-border peer-to-peer payments and money transfer services in the United States and internationally. It operates through two segments, Global Funds Transfer and Financial Paper Products. The Global Funds Transfer segment offers money transfer services and bill payment services through third-party agents, including retail chains, independent retailers, post offices, banks, and other financial institutions; and digital solutions, such as moneygram.com, account deposit, and kiosk-based services, as well as mobile app solutions. The Financial Paper Products segment provides money orders to consumers through its agents and financial institutions under the MoneyGram brand and on a private label or co-branded basis with various agents and financial institutions; and official check outsourcing services for banks and credit unions. MoneyGram International, Inc. was founded in 1940 and is based in Dallas, Texas.
SBI Holdings, Inc. engages in the online securities and investment businesses in Japn and Saudi Arabia. It operates through five business segments: Financial Services Business, Asset Management Business, Investment Business, Crypto-Asset Business, and Non-financial Business segments. The Financial Services Business segment consists of a range of finance-related business, including securities brokerage business; banking services business; and life, property, and casualty insurance business. The Asset Management Business segment includes setting, solicitation, and management of investment trust; investment advice; and financial products information. The Investment Business segment includes fund management and investment in Internet technology, fintech, blockchain, finance, and biotechnology-related venture companies; private equity; and funds management businesses. The Crypto-asset Business segment provides crypto-asset exchange and trading services. The Non-Financial Business segment consists of biotechnology; development and distribution of pharmaceutical products, health foods, and cosmetics with 5-aminolevulinic acid; research and development of antibody drugs and nucleic acid medicine in the field of cancer and immunology; the digitization of medical and health information; provision of solutions and services that promote the use of medical big data, medical finance; business working on advanced fields related to Web 3.0; and renewable energy business. The company is also involved in the real estate secured loans, online mobile game, and e-sports related businesses. In addition, it operates and develops cybersecurity systems; exports used cars; offers back-office support services; and develops, operates, manages, and invests in real estate properties. The company was formerly known as Softbank Investment Corporation and changed its name to SBI Holdings, Inc. in July 2005. SBI Holdings, Inc. was incorporated in 1999 and is headquartered in Tokyo, Japan.
Historical performance
Stock information
Market capitalization: $8083736576
P/E ratio: 13.2203
PEG ratio: 0
Dividend yield: 0.0362%
Company summary
Sea Limited, together with its subsidiaries, engages in the digital entertainment, e-commerce, and digital financial service businesses in Southeast Asia, Latin America, rest of Asia, and internationally. It offers Garena digital entertainment platform for users to access mobile and PC online games, as well as promotes eSports operations. The company also operates Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. In addition, it offers SeaMoney digital financial services comprising consumer, and small and medium-sized enterprises (SME) credit, mobile wallets, payment processing, and banking services under the ShopeePay and SPayLater brands; and acts as an underwriter for various life and non-life insurance products under the SeaInsure brand name, as well as insurance agency services. The company was formerly known as Garena Interactive Holding Limited and changed its name to Sea Limited in April 2017. Sea Limited was incorporated in 2009 and is headquartered in Singapore.
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.
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