The campus of Ant Group Co. in Hangzhou, China, on January 20.
Photographer: Qilai Shen / Bloomberg
Photographer: Qilai Shen / Bloomberg
According to new estimates from Bloomberg Intelligence, the valuation of Ant Group Co. be further reduced under new measures proposed by China to curb the market concentration in its online payments market.
Jack Ma’s fintech giant could be worth less than 700 billion yuan ($ 108 billion), according to the design proposals, which could cut the value of Ant’s Alipay service by half, according to senior analyst Francis Chan. Earlier this month, Chan lowered its Ant valuation to less than 1 trillion yuan, from about 1.44 trillion yuan.
“Ant Group’s valuation may decline further if the payment unit is forced to separate due to potential antitrust investigations by the central bank of China, ”Chan wrote in a research note.
The revised estimate for Ant is far from it valuations as high as $ 320 billion before the company was forced to drop its record initialization in November. China’s crackdown forced Ma’s company to withdraw the $ 35 billion IPO a few days before the scheduled listing in Hong Kong and Shanghai.
China’s central bank said on Wednesday that any non-bank payments company with half the online transaction market share, or two entities with a combined two-thirds share, could be subject to antitrust investigations.
If a monopoly is confirmed, the central bank may propose that the cabinet impose restrictive measures, including splitting the entity by business type. Companies that already have payment permits would have a one-year grace period to comply with the new rules, the central bank said.
Alipay, with approximately 1 billion users, controls 55% of the mobile payments market. A break could halve the 600 billion yuan valuation, Chan said, adding that it is doubtful Ant can relaunch its IPO this year.
The duopoly
Ant, Tencent dominate the mobile payments market in China
Source: iResearch data as of June. 30
Alibaba Group Holding Ltd., which has a stake in Ant, fell in Hong Kong for a second day, falling 2.9% at 9:47 AM. down to his business, ending several months of speculation about his whereabouts.
Read more: Why China changed the rules for Jack Ma’s Ant Group: QuickTake
– With help from David Scanlan, Lulu Yilun Chen and Jun Luo