Alibaba's financial arm eyes $10b Hong Kong IPO for 2017: Report

Ant Financial Services Group, Alibaba's financial arm which owns popular e-payment tool Alipay, is reportedly planning to raise at least $10 billion in an initial public offering in Hong Kong next year.
Written by Cyrus Lee, Contributor

Ant Financial is already in talks with the same sponsor team that dealt with parent Alibaba's listing affairs in the United States two years ago, according to a Hong Kong Economic Times report on Thursday, citing unnamed sources close to the matter.

The initial public offering is expected to raise no less than $10 billion. But without a clear timetable at this current stage, the Chinese financial firm is eyeing the Hong Kong IPO during the first half of 2017, according to the report.

A spokesman from Ant Financial responded that the company has not decided on where it will list. The financial firm's IPO ambition is not a secret as Alibaba's executive chairman Jack Ma told South China Morning Post last month that Ant Financial would be going for IPO someday but the management board had no specific plan as yet.

As the owner of the largest online payment service company Alipay, Ant Financial has more than 500 million users and took some 68.4 percent market share in the Chinese mobile payment sector last year. Ant Financial's valuation has reached $60 billion after the latest round of $4.5 billion financing in April, according to the report.

In a record-breaking US IPO back to 2014, Ant Financial's parent company Alibaba Group took the value of the deal to $25 billion and became the largest IPO ever in the US history.

However, Alibaba's first choice of the listing back then was not New York, but Hong Kong. Regulators in Hong Kong rejected Alibaba's dual-class shareholder structures where one set of shareholders, including the company's founder, have more rights than another, which violated Hong Kong's "one share, one vote" principle.

Ant Financial will not have similar regulatory hurdles if it chooses Hong Kong as an IPO destination, but it will need approval from Chinese top regulators to receive foreign investment first, as Chinese non-bank payment companies need relevant licenses that are confined for Chinese entities only.

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