Ant Or IPO In Shanghai And Hong Kong In October, With Revenue Of 120.6 Billion Last Year And R & D Of More Than 10 Billion

After Alibaba, the second giant ant group controlled by Ma Yun will also rush to the world's largest IPO.

On the afternoon of August 25, ant group (hereinafter referred to as "ant") announced that it had submitted the listing prospectus (Draft) to the science and Technology Innovation Board of Shanghai Stock Exchange, and simultaneously submitted A1 application documents to the Hong Kong stock exchange. This means ant group has taken a key step towards the synchronous listing process of a + H shares. According to the prospectus, ant group's annual revenue in 2019 is 120.6 billion yuan, and the net profit is 18.07 billion yuan; from January to June this year, ant group's revenue is 72.5 billion yuan, of which, the income from digital financial technology services accounts for more than 60%. The company plans to raise 48 billion yuan in A-share IPO.

This figure has no practical significance for the 21st century's financing, a reporter said. Due to the limitation of declaration format, the general company must fill in a financing amount. Because ant has not yet determined the valuation scale, the system automatically calculates a number based on the c-round financing (about RMB 1 trillion) and the issuance scale (a + H is no less than 10%), which does not represent any actual situation. Other listed companies on the science and Technology Innovation Board will do the same.

According to the calculation process, it is estimated that ants can complete all the audit procedures in mid September and obtain the registration and issuance of CSRC, and the formal listing and trading may be in the middle and late October. All kinds of data show that ant is a true technology company. Since the announcement of the IPO preparation news, its IPO process has also been concerned. Just on August 24, Zhejiang Securities Regulatory Bureau disclosed that CICC and CSCI had completed the listing guidance for ant group, and the process was only 10 days.

Wang Sheng, deputy general manager and chief strategic analyst of Shenwan Hongyuan Securities Research Institute, said in an interview with 21st century economic report that in recent years, with the deepening of domestic investors' understanding of new corporate governance structure and emerging business formats, the investor base in the domestic market has been greatly improved. At present, the leading high-quality technology targets of Hong Kong stocks are Alibaba, etc The target of competitiveness is the scarcity of Hong Kong stocks. "Therefore, we believe that companies in the new economy may get more attractive valuations in Hong Kong stocks."

Technical background

"Technology is the key to success and the foundation of an inclusive ecosystem." So the importance of ants in the technical documents. Alibaba founder Ma Yun has repeatedly said that he does not know technology, because he does not know, so he supports technology more than anyone else. "I always feel that something I don't understand is going to happen. In bat, Tencent or Baidu, the founders are all engineers. Their judgment is based on whether the technology can be completed or not; my judgment is based on whether there will be a death tomorrow if this matter is not completed. "

As a technology driven company, R & D investment and staffing become the key. By the end of 2017, 2018, 2019 and June 2020, the number of employees owned by ants was 9273, 12717, 15169 and 16660, respectively. In terms of staff professional structure, by the end of June 2020, the proportion of technical, business, sales and administrative personnel in the total number of employees of the company was 64%, 11%, 14% and 11%, respectively. In other words, more than 60% of ants' existing employees are technical R & D personnel.

In addition, in terms of technical strength reserve, ants have also revealed for the first time 26 self-developed core technology products, 18 world-class and national core technology awards, and 26279 patents or patent applications in 40 countries and regions around the world. Technical capabilities cover artificial intelligence, risk control, security, blockchain, database, credit risk management platform, intelligent investment advisory platform and other aspects.

From the data point of view, the company also continues to increase investment in technology and R & D. From 2017 to 2019 and the first half of 2020, the company's R & D investment was 4.789 billion yuan, 6.903 billion yuan, 10.605 billion yuan and 5.720 billion yuan, respectively, accounting for 7.32%, 8.05%, 8.79% and 7.89% of the operating revenue.

It is worth noting that one third of the board of directors of ant group is from technical background, including Hu Xiaoming (CEO of ant group), Cheng Li (CTO of Alibaba) and Ni Xingjun (CTO of ant group). Recently, ant Technology Group Co., Ltd. has undergone industrial and commercial changes. Peng Lei, Zhang Yong and Wu Wei withdrew from the board of directors, while Cheng Li, Hu Zuliu, Jiang Fang, Hao Quan and Huang Yiping are newly added directors. After the change, Cai Chongxin, Cheng Li and Jiang Fang were non-executive directors, while Hu Zuliu, Hao Quan and Huang Yiping were independent directors.

Ant group said that the largest proportion of the raised funds will be used for investment in innovation and science and technology, accounting for up to 40%. The remaining three areas are to help upgrade the digital economy, strengthen global cooperation and help global sustainable development, and supplement liquidity. "The core technology fields to be researched and developed in the future include large-scale consensus algorithm, active risk control, computational power dimension enhancement and so on."

Revenue exceeds 100 billion

Since the formal establishment of ant financial services in 2014, ant has targeted its service targets at small and micro enterprises. At that time, Peng Lei, CEO of ant financial services, said in an interview with 21st century economic news reporter: "we are only interested in the world of small and micro businesses. All businesses of ant financial will focus on small and micro enterprises and grassroots individual consumers. In the future, we will focus on Mobile, rural finance and internationalization."

In the past five years, ant's strategic positioning has not changed. In addition to financial services, the core barrier has expanded to data technology services. From the data, ant group's revenue consists of digital payment and business services, digital financial technology services, innovative business and other three categories. From January to June 2020, these three categories accounted for 35.86%, 63.39% and 0.75% respectively.

It can be seen that half of the revenue in the first half of 2020 is the income from digital financial technology services, while the revenue scale of this sector in 2019 is 67.784 billion yuan, accounting for 56.2%. The vast majority of this income comes from the technical service fees charged from cooperative financial institutions, and its growth and space are self-evident.

"We've had a lot of internal discussions, and we've come to the conclusion that we're providing services and platforms for the financial industry, not making ourselves a financial company." A senior member of ant financial once explained to the reporter of 21st century economic report that the keynote of ant group is still a technology company. It is estimated that the proportion of technical service fee in the total income of ants will rise from 50% in 2019 to 80% in the next five years.

In the field of financial management technology, yu'ebao is the largest money market fund product in the world. Alipay financial management technology, represented by yu'ebao, has cooperated with about 170 asset management companies. As of June 30, its asset management scale has exceeded 4 trillion, ranking first in the industry. In the field of insurance technology, ant cooperates with about 90 insurance companies to provide innovative insurance products. As of June 30, the amount of premium and security contributed by ants was 51.8 billion yuan.

According to the prospectus, the total number of new shares to be issued by ant in A-share and H-share is no less than 10% of the total share capital after the issuance, and the total share capital after the issuance is no less than 30.3897 billion shares (before green shoes), which means that it will issue no less than 3 billion new shares. Although the IPO price per share and target valuation have not been determined, the industry generally predicts that the company will probably be one of the largest IPOs in the world in recent years.

For today's ants, we still need to continue to increase investment, especially in the field of local life. In March this year, at the 2020 Alipay Partner Conference, Hu Xiaoming, CEO of ant group, announced that Alipay was upgraded to an open platform for digital life, focusing on the new strategic goal of digital service industry. This is the most significant strategic transformation in the 15 years since Alipay was born. Its competitor is meituan review, whose market value has just exceeded $200 billion.

"In the long run, we are optimistic about the listing of some emerging technology companies in Hong Kong. On the one hand, for China capital stocks, there are behavioral financial problems such as dislocation between the main business location of listed companies and the source of major investors, such as asymmetric information. In the past, the long-term trading volume of some Chinese companies listed in the US stock market was light, and the valuation level was lower than that of the same industry listed in the domestic market. Compared with investors in the US stock market, Hong Kong stock investors have a better understanding of the business and fundamentals of China capital stock company. After the Hong Kong stock market is listed, Asian investors will be more convenient to invest, and China capital stock may enjoy a liquidity premium. " Wang Sheng further said that at present, China is in a new era of structural transformation of manufacturing industry and expansion of domestic demand, and the future opportunities will be more in emerging economy and high-tech related industries, while Hong Kong stock investors also prefer subdivision tracks of related industries, such as chips, semiconductors, innovative medicine, Internet, etc., in general, they prefer leading enterprises in China's new economy and science and technology.