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The most significant news in the market this week was undoubtedly about Ant's fine!
It has been three years since Ant's initial public offering was suspended. On Friday, it was announced that Ant was fined 7.1 billion yuan, but Alibaba... $BABA-W (09988.HK)$ Surprisingly surged by 8% on the same night. Why did this happen? Today's article will analyze this.
1. Ant was fined, why did Alibaba surge
The reason is very simple: all negative factors have been cleared, and the final decision has been made!
The fine indicates that Ant Group's special rectification over the past three years has come to an end. The conclusion of the rectification means that Ant's IPO may soon follow!
At the same time, Alibaba's valuation is also extremely low. Undervaluation plus positive news led to Alibaba surging 8% on Friday night.
2. Reasons for Ant's three-year regulatory period
There are many reasons, but the core remains 'safety'.
Ant Group's most profitable business is credit. As of June 30, 2020, Ant Group facilitated a credit balance of 2.15 trillion yuan (consumer credit of 1,732 billion yuan and small business operator credit of 421.7 billion yuan).
Among this, the scale of personal consumer loans significantly exceeds the individual loan volumes of all domestic banks, while 'the universe bank' ICBC's credit card receivables and personal consumer loans are less than 1 trillion yuan.
The scale itself is not yet the most critical factor.More importantly, the source of funds: Of these two trillion yuan, 2% comes from Ant’s microloan capital, and another 98%...