Ant Group has set the price for the Hong Kong part of its initial public offering at HK$80 a share (US$10.32), implying it is raising roughly US$17 billion in the offshore tranche of its share sale, reports South China Morning Post, citing people familiar with the matter.
Ant is 33% owned by Alibaba (BABA) and controlled by BABA’s billionaire founder Jack Ma.
China’s biggest mobile payments company, Ant is set to list on Shanghai’s Nasdaq-styled Star Market and Hong Kong’s stock exchange just after the US elections on November 5. It will take the stock code 6688.
Ant’s IPO values it at US$313 billion, rising to US$318.5 billion including an over-allotment option. The South China Morning Post adds that analysts at banks involved in the offering have pegged Ant’s near-term valuation at US$350 billion to US$450 billion, according to its sources.
Alibaba has seen shares surge 46% so far this year- and the outlook from the Street is notably bullish. The Strong Buy consensus boasts 23 unanimous Buy ratings. That’s with a $334.15 average price target indicating that another 7.8% upside potential lies ahead.
Ahead of BABA’s quarterly results on Nov. 5, Oppenheimer analyst Jason Helfstein today raised the stock’s price target to $335 from $325 and reiterated a Buy rating, citing confidence in cloud profitability and digital transformation opportunities.
“We see cloud’s future growth dependent on ARPU expansion (spending shifting from infrastructure budgets to software budgets), driving continuous margin improvement and rapid revenue growth,” Helfstein stated.
“We believe diverse product supplies are a key advantage compared with peers. The recently launched Dollar Store (both online and offline) and duty-free JV, strategically target both less developed and travel retail markets, the fastest-growing sub-segments in China’s retail industry” the analyst added. (See Alibaba stock analysis on TipRanks).