China’s central leadership has given an tentative green light to billionaire Jack Ma’s (馬雲) Ant Group Co (螞蟻集團) to revive its initial public offering (IPO), two sources with knowledge of the matter said, in the clearest sign so far that Beijing its crackdown on the tech sector is easing.
Ant, a subsidiary of Chinese e-commerce giant Alibaba Group Holding Ltd (阿里巴巴), intends to file a preliminary prospectus for the share offering in Shanghai and Hong Kong as early as next month, the sources said, but declined to give names will.
The financial technology giant will have to await guidance from China’s securities regulator on the exact timing of prospectus filing, one of the sources said.
Photo: Reuters
The company’s listing was hastily delisted at the behest of Beijing in November 2020. At the time, it was expected to be worth about $315 billion, raising $37 billion, which would have been a world record.
“Under the guidance of regulators, we are focused on steadily moving forward with our corrective work and have no plan to initiate an IPO,” Ant said on his WeChat account late Thursday.
Ant wants to keep the IPO revival plans low profile pending a formal announcement, after catching the attention of regulators on its first attempt in 2020 with the ripples the offering created as the world’s largest share float ever, he said a separate source with direct knowledge of the matter.
As its economy slows in a politically thorny year in which Chinese President Xi Jinping (習近平) is expected to secure an unprecedented third term as party leader, Beijing is looking to loosen its grip on private companies, including tech giants, to help create a Achieve growth target of 5.5 percent.
“They are returning with their approach to make up for the lockdown they have had. All data from China has been terrible lately due to lockdowns and the last thing they want to do is make this problem worse. Over the next three to six months, we will likely see China’s crackdown easing,” said Equiti Capital’s London-based market analyst David Madden.
Chinese Vice Premier Liu He (劉鶴) told tech leaders last month that the government supports the development of the sector and would support companies seeking listings at home and abroad.
In another sign of Beijing’s softer stance, China’s ride-hailing company Didi Global (滴滴), which has been the subject of a cybersecurity probe since last year, is in advanced talks to buy a third of state-backed electric vehicle maker Reuters, reported Wednesday.
News of the talks comes after the Wall Street Journal reported on Monday that Chinese regulators will conclude their investigation into Didi, which could give investors hope of a recovery.
US-listed shares of Alibaba, which owns nearly a third of Ant, fell 7 percent after rising 7 percent earlier in premarket trading.
“Ant’s size and IPO must be smaller than planned for 2020 as market conditions have changed and cannot be compared to now,” said Dickie Wong (黃德几), Executive Director of Kingston Securities (金利豐證券) in Hong Kong.
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