Fintech giant Ant Group Co has scored a key regulatory approval from the China Securities Regulatory Commission for its Hong Kong listing, reports Bloomberg, citing people familiar with the matter.
Ant is 33% owned by Alibaba (BABA) and controlled by BABA’s billionaire founder Jack Ma.
According to Bloomberg, the regulatory commission has now approved Ant’s request to apply for a listing hearing with Hong Kong Exchanges and Clearing Ltd. Sources added that a Hong Kong hearing could take place as soon as this Monday.
In addition, Ant will also have to complete its registration for the Shanghai part of the initial public offering (IPO). Bloomberg reports that the Shanghai exchange website shows an application was submitted by Ant on September 22.
While the listing has been approved by the exchange, it must still be given the green light from the securities watchdog within 20 working days from the date of submission.
The blockbuster dual listing could generate as much as $35 billion, with a valuation for Ant Financial of over $280 billion.
According to Bloomberg, Ant will issue new stock of about 11% to 15% of its outstanding shares, with the float evenly split between Hong Kong and Shanghai.
Alibaba shares have surged 45% so far this year- and the Street’s Strong Buy consensus boasts 24 unanimous Buy ratings. That’s with a $328.86 average price target indicating that another 7% upside potential lies ahead.
Following BABA’s 3-day virtual investor day Oppenheimer’s Jason Helfstein left the event with incremental confidence in BABA’s digital economy strategy.
“After years of investment, strategic initiatives are paying off, with Cloud expected to be profitable and Cainiao reaching positive OCF in FY21. Revenue continues to diversify, with core eCommerce mix decreasing from 77% in FY15 to 47% LTM” the analyst wrote.
“In our view, BABA’s digital economy strategy and continuous innovations position the company to grow for the next decade. Maintain Outperform and raise PT to $325 (was $290) on higher valuation of AliCloud, Ant, and rolling SOTP valuation to FY22” he concluded. (See Alibaba stock analysis).