HONG KONG: Some of Ant Group’s global investors have valued the Chinese fintech firm at over $200 billion based on its 2020 performance, said people with knowledge of the matter, offering a more sober estimate after the shelving of its IPO and forced restructuring.
Investor hopes for a massive windfall were dashed when regulatory scrutiny scuppered the $37 billion initial public offering (IPO) days ahead of Ant’s November listing. Regulator-mandated restructuring has since made some more conservative with their internal analysis.
Investors’ revised estimates of Ant’s valuation, which will determine their returns, is reported here for the first time.
Warburg Pincus LLC valued Ant at slightly over $200 billion at year-end based on 2020 earnings and comparable company analysis, said one of the people. The U.S. private equity firm sold part of its holding in early 2020 at a $190 billion valuation in a private trade, other sources said.
Another investor said its estimate, based on Ant’s latest financial figures, was not very different from that of Warburg.
Warburg declined to comment on Ant’s valuation and did not immediately respond to a request for comment on the stake trade.
Ant’s valuation and revised listing timeline are unclear as the Alibaba Group Holding Ltd affiliate has yet to finalise its restructuring plan.
Still, its business as of the October-December quarter was little affected by regulatory scrutiny, said one of the people, who declined to be identified as the matter was private.
Ant declined to comment.
RESTRUCTURING
The Hangzhou-based fintech giant is shifting its company structure to that of a financial holding firm following regulatory pressure to subject it to rules and capital requirements similar to those for banks.
Ant’s valuation could consequently suffer, analysts have said, as valuations are much higher for technology firms than financial companies.
Ant was regarded as a tech firm in its previous fundraising in 2018 when it raised $14 billion at a valuation of about $150 billion in the world’s largest single fundraising.
Investors included private equity firms Warburg, Carlyle Group Inc, General Atlantic and Silver Lake Partners LP, plus Singapore sovereign wealth fund GIC Pte Ltd and existing shareholders Boyu Capital and Primavera Capital Group.
At its IPO pricing, Ant’s valuation soared to about $315 billion, or more than 31 times its forecast 2021 net profit.
With the earnings impact of restructuring unknown, one investor said it now valued Ant at about the same as the 2018 fundraising. Another said it marked its Ant investment at cost, meaning it does not see any return from the deal for the time being.
