Ant Group, Chinese e-commerce group Alibaba's fintech unit, is considering an IPO on the Hong Kong stock exchange as early as this year, having in its crosshairs a valuation of over $200 billion, two sources with knowledge of the issue revealed.
The world's most lucrative tech unicorn had been planning to simultaneously unload stocks in the global financial hub and mainland China, but is now leaning heavily on the city first because it will likely face a smoother listing process, the sources disclosed.
Ant is planning to sell between 5 percent and 10 percent of its shares in an initial public offering in what will be one of this year's biggest public listings in the world. Ant, based in Hangzhou, China, is 33 percent owned by Alibaba Group Holding and is controlled by Alibaba founder Jack Ma.
In 2014, Ant Group was founded to provide global financial services. The company runs Alipay, an online payment service that launched in 2004 and has grown into the biggest payment and lifestyle app in the world, the company said.
Ant started talks with banks in January to revive proposals for an IPO that was shelved more than a year ago because of regulatory and profitability problems. In a 2018 funding round, the Chinese financial services firm was estimated at $150 billion. Credit Suisse and China Foreign Capital Corp. reportedly had been setting the groundwork in talks with Ant at the time.
Alibaba (BABA) shares have been trading very impressively lately and on Wednesday the company's stock got another major lift. Its American depositary receipts rallied over 8 percent on the day the Ant IPO report.
Shares of Alibaba fell a bit after the group posted earnings in late May. But the stock immediately found its balance and has had no issues moving up in the ensuing weeks.
Ant has been working with its financial counselors on the planned Hong Kong float in the past months, sources stated, cautioning that details have yet to be validated and may change. In response, Ant disclosed the information about its initial public offering plans was not entirely accurate. Alibaba did not immediately respond to a request for comment.
Meanwhile, Ant Group has teamed up with Chinese shipping behemoth COSCO to bring blockchain technology to the shipping industry, the company announced on Monday.
The new contract brings Ant Group together with the third-biggest shipping conglomerate in the world to take advantage of the industry that supports up to 90 percent of global trade.