It is impossible to underestimate the ‘survival crisis’ that Ant is experiencing: market value may have halved, future uncertain

Tram Ho

According to Bloomberg, the market value of Ant may decrease further if the Chinese government continues to apply new measures to “rectify” the online payment platform Alipay.

Jack Ma’s financial technology giant could represent less than 700 billion yuan ($ 108 billion) under draft laws that are slated to be enforced. If that is the case, senior analyst Francis Chan believes that the value of Alipay – its payment arm will be halved. Earlier this month, Chan also lowered the value of Ant to less than 1 trillion yuan, from 1.44 trillion yuan.

“The value of Ant Group could be further reduced if its payments were forced to split because of the possibility of monopoly allegations by the central bank of China.”

 Không thể xem thường khủng hoảng sinh tồn mà Ant đang phải trải qua: Giá trị thị trường có thể đã giảm 1 nửa, tương lai bất định - Ảnh 1.

It is worth mentioning that before all the bad things happened, Ant was predicted to be valued at up to $ 320 billion.

The central bank of China said on Wednesday that any non-bank payment company with half the market share of online transactions or two entities with a combined market share of up to two-thirds could. is subject to the investigation of exclusive allegations.

If the monopoly is concluded, the central bank may ask the cabinet to impose tighter measures including splitting the company by business type. Companies that currently have a payment license will have a 1-year period to comply with the new regulation.

 Không thể xem thường khủng hoảng sinh tồn mà Ant đang phải trải qua: Giá trị thị trường có thể đã giảm 1 nửa, tương lai bất định - Ảnh 2.

Ant and Tencent now dominate the mobile payments market in China.

Alipay now has 1 billion users, controlling 55% of the mobile payment market share. The split could cut their RMB 600 billion worth in half. This raises the question of whether Ant is likely to go public again this year.

Alibaba owns a stake in Ant. The company’s shares themselves surged 8.5% on Wednesday after Jack Ma made his first public appearance since China began imposing sanctions on its companies. he. Earlier a lot of speculation arose surrounding his mysterious “disappearance”.

At the heart of the troubles Ant is going through is the fact that lawmakers think the company has a huge competitive advantage over small lenders and even large banks. Thanks to the vast amount of personal data gathered from the payment and lifestyle app Alipay.

This app is currently used by over 1 billion people. As a result, they hold a huge database of users’ spending habits, borrowing and bill payment history.

Taking advantage of that amount of information, Ant has made loans to half a billion people. However, their way of lending is through the capital of 100 commercial banks. Thus, banks will bear most of the risk of bad debts from borrowers while Ant only pockets profits as an intermediary.

Currently, the authorities are looking to rectify that business model – which only benefits Ant but comes with potential risks for the country’s financial system.

In order to do that, the authorities will not only set Ant lending rules as a bank – requiring them to provide more of their own capital on loans, but they must also plans to circumvent the company’s monopoly on user data.

Source: Bloomberg

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