One of the largest IPOs of the decade is about to be unleashed on the Asian markets later this year.
Jack Ma’s pet project Ant Group, Alibaba’s (BABA - Free Report) FinTech arm (33% stake), announced on Monday it would be dual listing in Shanghai and Hong Kong. Ant Group runs China’s most prominent mobile payment platforms, Alipay, and is being valued at over $200 billion, making it larger than most Wallstreet banks.
Ant Group offers a broad range of leading digital financial services in the most populous country on earth, making it an extremely desirable asset for any investor. Its biggest global competitor is PayPal (PYPL - Free Report) , but its expanding functionality gives it a much larger addressable market.
Alipay currently has 900 million users, almost tripling PayPal’s current user base, and Ant Financial offers a wide variety of services, including loans, wealth management, insurance, and enterprise services similar to Square (SQ - Free Report) . I suspect that Ant Group will be the shining star in Asia’s FinTech universe, and this will be reflected in affiliate Alibaba’s share price because of its 33% ownership in the company.
Unfortunately, US investors will not be able to directly invest in Ant Group (at least at first). We can invest indirectly through Alibaba, which has a lot more going for it than just this FinTech IPO.
Ant represents over $20 of every BABA share (when valuing Ant Group at $200 billion), and its continued growth strengthens Alibaba’s already firm grip on the rapidly digitalizing Chinese economy.
Alibaba has a cornucopia of digital products at its disposal, and it will use all of them to control and profit off the prolific digitalization occurring in Asia today.
The fact that the Amazon (AMZN - Free Report) of the East (aka BABA) has not taken off like its western counterpart is baffling. Alibaba controls the e-commerce space (80% market share), the cloud-computing category (roughly 50% market share), and a 33% stake in the leading FinTech in the most populous and soon-to-be largest economy on earth.
Alibaba is valued at less than half of Amazon despite producing substantially wider margins, greater profitability, and having a larger topline growth outlook for the next couple of years.
This stock still has a massive amount of upside potential just waiting to be priced in. The Chinese economy is beginning the recover past pre-COVID growth rates, with Alibaba’s digital technology being the centerpiece to this expansion.
15 out of 15 analysts are calling BABA a buy today. Alibaba is going to the stratosphere, and you want to be on board when these shares start reflecting this extraordinary enterprise’s full potential.
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