The Ant Group Co. headquarters campus in Hangzhou, China, on January 20.
Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
Ant Group Co.’s rating may be further reduced with new measures proposed by China to contain market concentration in its online payments market, according to new estimates by Bloomberg Intelligence.
Jack Ma’s fintech giant may be worth less than 700 billion yuan ($ 108 billion) under preliminary proposals, which could cut the value of Ant’s Alipay service in half, according to senior analyst Francis Chan. Earlier this month, Chan reduced his Ant rating to less than 1 trillion yuan, from about 1.44 trillion yuan.
“Ant Group’s rating could drop even further if its payment unit is forced to break due to the potential antitrust polls by China’s central bank, ”wrote Chan in a research note.
The revised estimate for Ant is far from valuations that reached $ 320 billion before the company was forced to discard its record initial public offering in November. China’s crackdown forced Ma’s firm to withdraw the $ 35 billion IPO just days before its planned listing in Hong Kong and Shanghai.
China’s central bank said on Wednesday that any non-bank payment company with half the market share for online transactions, or two entities with a combined two-thirds share, could be subject to antitrust investigations.
If a monopoly is confirmed, the central bank may suggest that the cabinet impose restrictive measures, including dismembering the entity by type of business. Companies that already have payment licenses will have a one-year grace period to comply with the new rules, the central bank said.
Alipay, with around 1 billion users, controls 55% of the mobile payments market. A spin-off could halve its 600 billion yuan valuation, Chan said, adding that it is questionable whether Ant could re-launch its IPO this year.
The duopoly
Ant and Tencent dominate the mobile payments market in China
Source: data from iResearch in June. 30
Alibaba Group Holding Ltd., which holds a stake in Ant, fell for the second day in Hong Kong, falling 2.9% at 9:57 am. The shares jumped 8.5% on Wednesday after Ma appeared in public for the first time since China started to clip down on its business, ending several months of speculation about his whereabouts.
Read more: Why China changed the rules of Jack Ma’s ant group: QuickTake
– With the help of David Scanlan, Lulu Yilun Chen and Jun Luo