World

Fidelity Cuts Ant Valuation Again as China Crackdown Spreads

By BLOOMBERG

Fidelity Investments has slashed its estimate of Ant Group Co.’s valuation for at least the second time this year, underscoring the deteriorating outlook for Jack Ma’s fintech giant as the Chinese government ramps up regulation of the industry.

The Boston-based money manager’s valuation of its Ant holdings at the end of June implied a total market capitalization of about $78 billion, according to regulatory filings compiled by Bloomberg. That’s down from $144 billion in February and $235 billion just before Ant’s initial public offering was abruptly suspended by regulators in early November.

Another filing shows Fidelity may have reduced its valuation even further in July, to about $67 billion. The limited scope of that month’s disclosure makes it difficult to know whether the drop reflected a valuation cut or a change in fund holdings. Representatives at Fidelity and Ant declined to comment.

Fidelity’s decision could add pressure for other investors to adjust their valuations for Ant, though many global funds have kept their estimates within the $170 billion to $190 billion range. 

The future of Ma’s company has been shrouded in uncertainty as Chinese regulators increase scrutiny of the country’s billionaires, sort through details of a fintech industry overhaul and implement new rules on data security and IPOs. Ant, which named a new chief executive officer in March, has committed to drastically revamping its business.

BlackRock Inc. assigned Ant a valuation of $174 billion, according to its filing on Aug. 26. T Rowe Price Group Inc. set it at $189 billion, based on a filing on Aug. 25. Goldman Sachs Group Inc. said in an Aug. 4 research report that it estimated the company was worth $173 billion. 

A representative for BlackRock didn’t immediately respond to a request for comment. T Rowe Price declined to comment in an emailed statement. 

The last-minute scuttling of the company’s IPO 10 months ago marked the start of a sweeping campaign by Xi Jinping’s government to rein in China’s free-wheeling private sector, particularly data-hungry tech behemoths like Ant that had attracted billions of dollars from foreign money managers. While Beijing has tried in recent days to reassure investors of its commitment to supporting private businesses, few expect authorities to approve a revival of Ant’s IPO plans anytime soon.

Ant is still waiting for an official sign-off on its government-mandated transformation into a financial holding company, a structure that will dramatically increase its capital requirements and restrain its ability to grow. Authorities have ordered Ant to open its payments app to competitors and improve data protections. The company will also need to reduce the size of its main money-market fund — once the world’s largest — and sever some ties between its payments platform and other financial services.

Fidelity’s valuation for Ant in June was 48% lower than when it invested in the company in 2018. Other big investors include Warburg Pincus, Carlyle Group and Temasek Holdings.

Dayang Norazhar

Recent Posts

Broadband Unity Package helps bridge digital divide among Malaysians

The Broadband Unity Package introduced by the Ministry of Communications and Digital can help bridge…

2 hours ago

Malaysia, Singapore reaffirm bilateral cooperation in three areas

Malaysia and Singapore reaffirmed bilateral cooperation on personal data protection, cyber security, and digital economy…

5 hours ago

MPs need to maximise resources to help constituents, says Fahmi Fadzil

Members of Parliament (MP) have been urged to practise prudence and maximise all available resources…

5 hours ago

Malaysia to host ASEAN-GCC summit, says Zambry

JAKARTA -- Malaysia will host the ASEAN-Gulf Cooperation Council (GCC) summit in September or October this…

5 hours ago

Malaysia, Singapore to work together to tackle online scams

Malaysia and Singapore are working together to share information and expertise as well as best practices…

5 hours ago

LPP and FAMA instructed to intervene quickly to overcome vegetable shortage

The Farmers Organisation Authority (LPP) and the Federal Agricultural Marketing Authority (FAMA) have been instructed…

5 hours ago