Ant Group plans restructuring, paving way for Hong Kong IPO!

The Jack Ma-backed Ant Group announced in July 2023 that it is planning a restructuring that will break off some non-core operations of its China financial-related business.

The Alibaba Group affiliate is looking at excluding its blockchain, database management services and international businesses from a main entity that will be used to apply for a financial holding license in China.

Once the restructuring is complete and Ant secures the license, it can prepare for a public listing in Hong Kong instead of reviving the dual Shanghai-Hong Kong listing plan that was suspended by Chinese authorities in 2020.

Earlier this month, Ant Group announced a surprise share buyback that valued the fintech giant at $78.54 billion, well below the $315 billion it was valued previously. However this is an excellent opportunity for pre-IPO investors to grab shares in what maybe the last time they are avalable before the IPO and at what many analysts say is actually well below market value.

Nothing would say forgiveness like an Ant Group IPO

The debut of Alibaba’s fintech unit was one of the most-anticipated before it was cancelled two years ago. A revival could be the clearest sign yet of regulatory easing.

Now that Alibaba Group has split into pieces, the race is on to see which of its six Baby Babas will be first to list shares on a public bourse. After years of scrutiny, including a record fine, an initial public offering (IPO) for any of Alibaba’s divisions would act as a de facto thumbs up from Chinese regulators. The real prize, though, would be the public sale of gargantuan affiliate Ant Group.

Alibaba’s grocery chain Freshippo is working with China International Capital Corporation (CICC) and Morgan Stanley to prepare for a Hong Kong listing, however Ant Group is also expected to list in the next 12 months and the announcement could come at short notice, meaning investors have little time to invest before the share price increases on the day of the listing.

Analysts say Alibaba’s major overhaul will likely put the spotlight back on Ant Group’s record-breaking IPO which is likely to list early in 2024.

Ant received approval from the China Banking and Insurance Regulatory Commission earlier this year to expand its consumer finance business, a sign the company could be moving one step closer to resolving regulators’ concerns.

What is the current Ant Group share price?

Since the recent share buy back and restructuring of the company the share price has now been reduced from HK$80 to HK$24.50, this is an excellent time to invest as once media attention from an IPO announcement takes place the share price is likely to rise towards the HK$50 mark where it is expected to list at.

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