Ant Group is set to deliver a boost to Scottish Mortgage as details of its IPO point towards a valuation of at least $200bn.
The Chinese fintech business is the twelfth-largest in James Anderson’s (pictured) portfolio and represents 2.5% of net asset value. In 2018, the fintech company was valued at $150bn after a funding round that raised $14bn from investors, including Baillie Gifford, alongside Temasek and Warburg Pincus.
Ant Group, which has licences for payments, online banking, insurance and micro lending, announced its intention to IPO in July. On Tuesday, it filed for a dual listing in Hong Kong and Shanghai with its prospectus revealing its financial health publicly for the first time. It stated it intended to sell more than 10% of its share capital in the dual listing.
Revenue for H1 2020 was 72.5bn yuan, up nearly 40% on the same period in 2019. Over the same period, profits increased nearly 12-fold to 21.9bn yuan.
Ant Group did not reveal the size of the offering, but Reuters reports three sources have said it aims to raise more than $20bn and up to $30bn if market conditions allow. That would would potentially value the company between $200bn and $300bn.
In July, Stifel said while Ant Group represents just 2.5% of Scottish Mortgage NAV, a successful IPO would boost sentiment towards the investment trust’s unlisted holdings. That same month Scottish Mortgage shareholders had voted to increased the limit on unquoted holdings in the portfolio from 25% to 30%.
Ant Group is 33% owned by Alibaba, which is a top-10 holding in Scottish Mortgage with a 5.6% weighting.
The company is best known for mobile payments business Alipay, which was spun out from Alibaba in 2011 before it was rebranded Ant Financial in 2014. In May this year the company rebranded again as Ant Group.
See also: Scottish Mortgage investors nudged to lock in gains after coronavirus outperformance
