The Ant Group continues to be capable of safe the world’s largest IPO, says the Chinese language investor

Liu Qiang, Vice President of Fosun Technology and Financial Group, Vice Chairman of Hani Securities, speaks with Arjun Kharpal, Senior Correspondent of CNBC, on the first day of CNBC East Tech West at LN Garden Hotel Nansha Guangzhou on November 17, 2020 in Nansha. Guangzhou, China.

Zhong Zhi | Getty Images Entertainment | Getty Images

Ant Group remains in a position to complete the world’s largest IPO – Even if China’s regulatory hurdles weigh heavily on the financial technology giant, says one of the country’s main investors.

Liu Qiang, vice president of Fosun Technology and Financial Group, which has a small stake in Ant Group, said the fintech giant’s underlying technology and access to an ecosystem of underserved customers remain a strong investment proposition.

“I still believe they can set the record,” Liu, who is also the vice chairman of Hani Securities, told CNBC’s Arjun Kharpal on Tuesday. He spoke at CNBC’s annual East Tech West conference, held this year both remotely and on-site in Guangzhou’s Nansha district, China.

Increased financial regulation

Ant Group’s much-anticipated $ 34.5 billion double listing was abruptly suspended on November 3 after its leaders, including Controller Jack Ma, were summoned and interviewed by Chinese regulators. Days later, authorities stressed the need to further regulate the country’s fintech industry, including microcredit.

Liu welcomed the regulatory move, noting that financial products that are both online and offline should be regulated. In fact, he said clampdowns can force players to “put more effort into training users,” and such moves previously resulted in “investors becoming more sophisticated and investing more”.

Liu Qiang, Vice President of Fosun Technology and Financial Group, Vice Chairman of Hani Securities, speaks at LN Garden Hotel Nansha Guangzhou on November 17, 2020 in Nansha, Guangzhou, China on the first day of CNBC East Tech West.

Zhong Zhi | Getty Images Entertainment | Getty Images

For its part, the Ant Group can handle this pressure, Liu said.

He noted that it is “one of the few” companies that can successfully manage “all three dimensions” required of a financial technology company: flow of capital, flow of data, and flow of trade. However, he declined to set a price for later listing.

“I can’t predict how much they can raise. It depends on the capital markets,” he said.

An opportunity after Covid

The postponement comes against the backdrop of the coronavirus pandemic, where financial technology services, particularly in China, have been rapidly adopted. Ant Group is poised to capitalize on this boom with its large ecosystem of small retail customers, Liu said.

I think the authorities will continue to study the market and give directions for development.

Liu Qiang

Vice President of Fosun Technology and Financial Group

China is already one of the world’s leading users of financial technology. The country is now home to a $ 29 trillion mobile payments market and is poised to become the world’s first cashless society, according to a fintech report by the South China Morning Post.

Any efforts to recover from Covid will only accelerate this, said Liu, who forecast the industry to grow at 50% annualized over the next five years.

However, further developments in the fintech industry are also likely to be associated with additional regulations, said Liu.

“I think the authorities will continue to study the market and give directions for development,” he said.

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