Jack Ma's Ant Group, which owns Alipay, had profits of around $3.5B in the six months to March, ahead of planned concurrent IPOs in HK and Shanghai
Stella Yifan Xie / Wall Street Journal : Tweets: @wsjmarkets Tweets: @wsjmarkets : $3.5 billion profit in six months: Jack Ma's Ant shows why it's a juggernaut ahead of IPO https://www.wsj.com/...
Context & Ripple Effects
Ant Group's path to market has been building for two years: back in 2018, the Alibaba affiliate was already posting about $1.4B in annual pretax profit, up 65% YoY, and last month sources said it was planning a concurrent Hong Kong and Shanghai listing at a $200B+ valuation. Today's disclosure of roughly $3.5B in profit for the six months to March is the earnings proof behind that ask.
The timing matters because the filing followed within a day — Ant formally lodged its IPO paperwork reporting $3.2B of H1 2020 profit, up 1,000% YoY, on $10.48B of revenue. For a company that began as Alipay, a payments processor for Alibaba's marketplace, the numbers make the case that it is now a diversified financial juggernaut in its own right.
First-order effects
- Investors in both Hong Kong and Shanghai get their first hard look at Ant's profitability just as bookbuilding begins, giving underwriters a concrete earnings base to defend the $200B+ valuation against.
- Alibaba benefits directly: its payments affiliate enters the listing process with profits running at more than double its full-year 2018 level, raising the value of Alibaba's stake.
Second-order effects
- China's big banks, which count among Ant's shareholders and increasingly its partners rather than victims — Ant set out to disrupt them but now works with many of them — stand to gain from the listing rather than fight it.
- A successful dual listing sets a pricing benchmark for China's other large fintech and platform businesses weighing domestic listings, pulling deal flow toward Hong Kong and Shanghai at the expense of US venues.
Third-order effects
- Concentrating one of China's most valuable private companies' debut onshore entrenches the pattern of strategic tech champions listing at home, reshaping where global capital must go to own Chinese fintech.
- The same scale that powers the valuation also concentrates consumer finance risk in one platform — a tension that later coverage suggests materialized, with Ant's profits collapsing under the government crackdown before a 193% YoY rebound to $1.05B in mid-2024 as it regains its footing.
The trend: China's platform-finance giants are converting payments dominance into diversified financial-services profits and listing onshore, with regulatory posture — not market demand — emerging as the binding constraint on how far that model runs.