Ant lays ground for massive IPO

Business | Bloomberg and Carrie Chen 8 Dec 2016

A team of executives from Alibaba Group Holding's banking and payments arm, Ant Financial, recently visited Silicon Valley to size up potential investments and lay the groundwork for an initial public offering expected as soon as next year.

Executive chair Lucy Peng, who was in San Francisco last week with fellow executives, said she understands the challenges, adding an IPO will give Ant an opportunity to tell its story, provide transparency to investors and raise money for acquisitions. She said many people see Ant as a payments company when it's much, much more.

"This is probably our fault and perhaps we should be better at letting everyone know what Ant actually does. Payments is just the tip of the iceberg. What's big is under the water."

Ant hasn't said how much it is seeking to raise, but a September valuation by CLSA put it at US$75 billion (HK$585 billion). Peng declined to say where Ant will list but said it has plenty of options.

Chinese companies no longer need to list offshore to win international credibility, said Cyril Han, vice president of corporate finance, and they can choose a joint offering in Shanghai and Shenzhen.

Insiders said in August that Hong Kong was a good bet. But Ma has since expressed reservations, arguing that its listing regulations are outdated and ill- suited to Ant's needs.

Separately, Hong Kong construction subcontractor Progressive Path Group debuts today after its shares were oversubscribed by 530 times.

In the gray market, it closed at 70 HK cents, 16.67 percent higher than its 60 HK cents offer price, earning investors a paper profit of HK$500 for one board lot of 5,000 shares, according to Phillip Securities data. On Bright Smart Securities' platform, it rose 18.33 percent to 71 HK cents, representing a paper profit of HK$550 per minimum lot.

Meanwhile, mainland rail fastening system provider Hebei Yichen Industrial Group Corp is expected to start bookbuilding tomorrow.

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