Alibaba's Ant Group Plans Dual Listings in Hong Kong and Shanghai

One of the largest money market funds in the world is valued over $200 billion

Author: Anthony Russo   

Alibaba Group Holding Ltd.'s (NYSE: BABA; HKEX: 09988) financial arm Ant Group has begun the process for simultaneous dual listings in Hong Kong and Shanghai to expedite its goal of "digitizing" China's service sector.

Ant, one of the largest money market funds in the world, said it plans to list shares on China's Nasdaq-esque tech exchange in Shanghai known as the Star Market and the Hong Kong stock exchange. While Ant did not disclose any numbers for the IPO's, Reuters reported earlier this month that it was eyeing to sell between 5 to 10% of its shares in a listing. 

"Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders and regulators," Eric Jing, the chief executive officer of Ant, said in a statement today.

"Through our commitment to serving the under-served, we make it possible for the whole of society to share our growth."

The STAR Market has become a popular alternative to Nasdaq for Chinese stocks amid Sino-American trade tensions and a crackdown on Chinese stocks by the United States government. As Chinese firms pass on listing in the U.S, the biggest losers are U.S. stock exchanges and investment banks. The NYSE and Nasdaq will lose millions of dollars in fees if the delistings continue, as reported by Bloomberg in June.

According to the South China Morning Post, Bank of America analysts have projected Jack Ma's firm's value at $210 billion based on approximately 45 times its 2021 earnings estimates. The Alibaba-owned news outlet also said that digital services made up over half Ant's revenue in the year ending March 31; digital services consisted of micro-financing, wealth management, and insurance. Ant aiming to grow its services fees to 80% of total revenue within the next five years. 

If Ant goes on with the IPO in Hong Kong, it would be following the footsteps of its parent. Alibaba, which raised $13 billion in the city after the underwriters expressing their over-allotment option. On Ant's move, the stock in Alibaba in early trading Monday rose 3% to $254.85 per American depositary share.