Jack Ma’s fintech giant may be worth less than 700 billion yuan ($108 billion) under the draft proposals, which could reduce the value
of Ant’s Alipay service by half, according to senior analyst Francis
Chan. Earlier this month, Chan lowered his Ant valuation to less than 1
trillion yuan, from about 1.44 trillion yuan.
“Ant Group’s valuation may plunge further if its payment unit is forced to break up due to potential anti-trust probes by China’s central
bank,” Chan wrote in a research note.
The revised estimate for Ant is a far cry from valuations that ran as high as $320 billion before the company was forced to scrap 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
probes.
If a monopoly is confirmed, the central bank can suggest the cabinet impose restrictive measures including breaking up the entity by its
business type. Firms already with payment licenses would have a one-year
grace period to comply with the new rules, the central bank said.
Alipay, with about 1 billion users, controls 55% of the mobile payments market. A break up could reduce its 600 billion yuan valuation
in half, Chan said, adding it’s questionable whether Ant can relaunch
its IPO this year.Alibaba Group Holding Ltd., which holds a stake in
Ant, fell for a second day in Hong Kong, dropping 2.9% at 9:57 a.m. The
shares jumped 8.5% on Wednesday after Ma emerged in public for the first
time since China began clamping down on his businesses, ending several
months of speculation over his whereabouts.
