Capital Calls: A Dark Read of Ant’s Valuation Tea Leaves
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LOW LOYALTY. Shareholders have their work cut out for recalculating Ant’s value. Temasek’s investors in Carlyle (CG.O) are locked in holding shares in the Chinese fintech group after its IPO failed. Regulators have forced Ant to review its key business practices to learn more, and a political campaign against founder Jack Ma adds even more uncertainty.
US asset manager Fidelity Investments has reassessed its stake. In a February filing, it cut its position in half from August last year, implying a total valuation of $ 144 billion for Ant, the Wall Street Journal reported.
It sounds generous. Take Ant’s stable digital payment business. If the unit resumes its pre-pandemic growth rate of 17% reached in 2019, that means sales of 61 billion yuan this year, based on annualized figures for 2020. US peer PayPal (PYPL. O) has an operating profit margin of 15% and an enterprise value of 46 times expected operating profit. Under these assumptions, the payments arm is only worth $ 64 billion. Ant’s other business units may get even smaller. (By Robyn Mak)
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