Jack Ma’s Ant Group Co. will lean towards the demands of Chinese authorities who want to rein in the country’s fast-growing Internet giants, revamping its business.
The ant will now be effectively overseen as one more bank, a step towards its growth and far-reaching impact, a groundbreaking initial public offering that the government abruptly delayed late last year.
The overhaul provided by the regulator and the agency on Monday will see the ant transform itself into a financial holding company, instructing competitors to open its payment app to competitors, increasing monitoring of how the business will ultimately conduct and oversee customer operations. Protection. This will reduce the outstanding value of the money-market fund Uebao.
The directive came as Chinese regulators vowed to curb the “reckless” pressure of technology companies to finance and end online monopolies. The two pillars of Ma’s empire – Ant and e-commerce giant Alibaba Group Holdings Limited – are at the center of an extended investigation, sending a message to the country’s largest corporations and their leaders to align with Beijing’s priorities.
A number of government agencies, including the People’s Bank of China, and regulators overseeing the banking and security sector met with Ant to signal the changes. Ant said in its statement that the agency would plan its growth in a “national strategic context” and ensure that it had a greater social responsibility.
Regulators also fined Alibaba মাসে 2.8 billion this month following an anti-trust investigation that the e-commerce company abused market dominance.
“Alibaba’s darkest time is over, but I wouldn’t say it on behalf of Ant Group,” said Dong Jimiao, lead researcher at the Zhangguancun Internet Finance Institute. “The latest announcement clarifies the structure of the Anti-Restructuring, but the tone is still harsh and some of the requirements are stricter than expected. I don’t think the overhang has been removed for anti-investors at this stage. “
Reconstruction has left Anty’s core business intact, making it harder for regulators to leverage companies that were able to direct traffic to its delivery service Alipe – which has one billion users – through asset management, customer delivery and even other financial services. Laying services and delivery.
Authorities now require Ants to close any misconceptions of money with other financial products, including its GB and Huawei ndding services. Ants said they would fold these units into its customer finance arm, apply for licenses for personal credit reporting and improve consumer data security. .
Instead of setting Huawei as the default or preferred option, Ants could add more credit lending options to Alipay, Hong Kong-based analyst Thomas Chong with Jeffrey Financial Group Inc. wrote in a report that coordination between Huawei and Yubaoi could be affected.
“The prospect of ant growth has only become more challenging, it will be more difficult to capitalize on the amount,” said Mark Tanner, founder of Shanghai-based consultancy China Skinny. “These growth challenges, in addition to the broader concerns about technology sector regulators, cast a shadow over what the value and attractiveness of their IPO was.”
Ant chairman Eric Jing promised staff last month that the agency would be the last to go public. Francis Chan, an intelligence analyst at Bloomberg, estimates that last year’s মূল্য 260 billion valuation would be reduced by about 0%, given the change in rules in areas including payments.
Changes to the payment business were among the top priorities cited by regulators, and Ant promised to return the business “at its source” by focusing on small-scale payments and benefits for users.
Earlier this year, China proposed measures to curb the market density in online payments, which Ant and rival Tencent Holdings Ltd. have transformed into their ubiquitous mobile applications that connect 1 billion people.
The central bank said in the draft rules that a non-bank payment company with two-thirds of the market share or two-thirds of the shares in two online transactions could be subject to unreliable investigation.
If the monopoly is confirmed, the central bank may recommend that the cabinet impose restrictive measures, including dissolving the entity through its type of business.
Mobile payments are the only part of contributing to online transactions, but they have become the most important platform in China, boosting the growth of other services.
Investors are also waiting for the final rules aimed at curbing online customer nding, which was unveiled late last year.
With all the changes still on track, an ant IPO remains “too far away,” said Dong of the Zhangyuankun Internet Finance Institute.
“PBOC’s statement emphasizes risk and correction, while Ant Group’s statement is positive for investors,” Shujin Chen, head of Jefferies’ Hong Kong-based financial research, wrote in a report. “Ants will be China’s first financial holding company, a milestone in fintech control. Ants are looking at a more explicit roadmap for reconstruction, although some details remain unclear.