Alipay to start China IPO process as soon as 2016

A worker walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, August 24, 2013. China's e-commerce market is expected to leapfrog that of the United States this year to become the world's largest by total customer spending, management consultancy firm Bain & Company says, and could account for half of all Chinese retail spending within a decade. Picture taken August 24, 2013. REUTERS/China Daily (CHINA - Tags: BUSINESS LOGO SCIENCE TECHNOLOGY) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA



Alibaba Group Holding Ltd.’s finance affiliate is planning an Initial Public Offering (IPO) on Shanghai’s main board in what could be China’s highest IPO valuation since 2010, according to two people familiar with the matter.
Zhejiang Ant Small & Micro Financial Services Group Co. has been profitable for three years, enabling it to meet the listing requirements, and may begin the process as soon as this year, the people said, requesting not to be named because the matter is private. The owner of Alipay, China most popular payments system, prefers a dual listing with Hong Kong if it gets regulatory approval, the people said.
Ant Financial, which is controlled by Alibaba founder Jack Ma, dominates payments on China’s biggest e-commerce platforms through Alipay and also manages Yu’E Bao, the nation’s largest money-market fund. The company is currently targeting a private round of fundraising for at least $3.5 billion at a valuation of about $60 billion, people familiar with the matter said in April. Alipay, one of the more recognizable names in online finance and consumer payments, would be the largest Web player by far on mainland bourses.
“China doesn’t have an Internet company of this scale and influence, so it could enjoy a significant premium in value if it lists in the country,” said Li Muzhi, a Hong Kong-based analyst at Arete Research Services LLP. “A lot of the potential retail investors are also Ant Financial’s users.”
Ant Financial declined to comment in an e-mailed statement.
China’s stock listing rules requires companies to be profitable for at least three years and accumulate a profit of more than 30 million yuan ($4.6 million). The entities also need to generate accumulated cash flow of at least 50 million yuan, or post a total of 300 million yuan for revenue in the latest three years, according to the regulations.
Ant meets the measures, said the people, who have direct knowledge of its earnings. The people didn’t say how much the company would seek to raise or what valuation it would have at listing. An IPO at a $60 billion valuation would be the biggest on the mainland since Agricultural Bank of China listed in Shanghai in 2010.

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