Regulatory approval for Ant Group's Shanghai IPO clears path to create a Chinese rival to FAAMG

Source: Global Times Published: 2020/10/21 23:33:47


China's securities regulator announced Wednesday that it has green-lit fintech giant Ant Group's registration-based IPO in the STAR Market in Shanghai, clearing the path for the creation of a Chinese rival of the US tech super league, FAAMG.

The regulatory approval for Ant Group's Shanghai listing came on the heels of a statement by the China Securities Regulatory Commission (CSRC) on Monday that Ant Group has received administrative approval of its application for a separate floatation in Hong Kong.

The fintech behemoth in which Alibaba holds a 33 percent stake has also passed the Hong Kong Exchanges and Clearing's hearing. 

The operator of Alipay, one of the two most popular payment apps in China (the other is Tencent's WeChat Pay) announced Wednesday night that it raked in revenues of 118.19 billion yuan ($17.76 billion) in the first three quarters, up 42.56 percent year-on-year, mostly driven by rising income from its digital fintech platform. Gross profits at Ant Group soared 74.28 percent to 69.55 billion yuan. 

Ant Group revealed that Zhejiang Tmall Technology Co, a fully owned subsidiary of Alibaba, has plans to purchase 730 million shares of its upcoming A-share offering.

The preliminary enquiry for the Shanghai offering under the stock code 688688 is scheduled for Friday and the IPO subscription is set for October 29.

The listing committee of the STAR Market of the Shanghai Stock Exchange granted the listing in mid-September, but it required Ant Group to disclose specifics of the three main areas that funds raised by the IPO will go. They include a push for an upgrade in the digital economy, strengthen global cooperation, boost global sustainable development, and further commitments to sci-tech innovation.

With the regulatory breakthrough, A-share investors who have long enjoyed a tech-enabled lifestyle but are largely unable to access shares in Alibaba, Baidu, Tencent, Meituan Dianping and Xiaomi - which could be considered the Chinese equivalents to FAAMG, a US grouping consisting of Facebook, Amazon, Apple, Microsoft, and Google parent Alphabet - will soon be able to invest in these big Chinese tech names. 

The stock linkups between the mainland and Hong Kong bourses allow retail investors to trade some of the tech stocks listed in Hong Kong, but only a tiny portion of A-share investors satisfy the eligibility criteria, that require an aggregate balance of not less than 500,000 yuan ($73,910) in individual investors' trading accounts. 


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