According to Bloomberg Research, Ant Group may be valued at $29 billion (RMB 185.353 billion) in the worst-case scenario after it is declared as a financial holding company.
On April 27, Bloomberg Research analyst Francis Chan released a research report estimating that Ant Group’s valuation would be between $29 billion and $115 billion after it is regulated as a bank as a financial holding company, well below the original estimate of $320 billion. This means that Ant Group’s valuation would be significantly reduced by 90.9 percent in the worst-case scenario.
Chan said regulatory constraints would likely cause Anthem’s revenue growth to drop to about 10 percent from 30 percent last November, dragging down the profit outlook.
Chan added that Ant Group’s valuation would be on par with banks and other mainstream financial institutions, and that its credit arms, “Flower” and “Debit”, would suffer from being cut off from Alipay. As a result, Ant Group’s access to personal data through credit will be more restricted.
Chan said that Ma currently holds a controlling stake in Ant Group, and that with or without Ma, “Ant Group, which is a Chinese fintech giant, will probably lose its status in the future.
Chan believes that if Ant Group is considered a traditional bank, even a fast-growing one like China Merchants Bank, it may be valued at no more than RMB 487 billion to RMB 492 billion, while in an unfavorable scenario, the market may evaluate Ant based on the MSCI China Financials Index, which would then be valued at between RMB 186 billion and RMB 245 billion.
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