On February 9, according to media reports, Ant Financial planned to issue new shares to raise US$5 billion. The funding round could begin as early as this month. At the time, Ant Financial may seek to list in two places, one in New York, another in Hong Kong and another in Shanghai, but its restructuring plan has not yet been approved by Chinese regulators.

Relevant people said that if the financing amount is consistent with the target, Ant Financial’s valuation may be as high as 120 billion U.S. dollars, nearly twice the value of the last round of financing nearly two years ago. By then, Ant Financial Services will become the world’s largest unicorn.

Prior to this, Alibaba will acquire 33% of Ant Financial Services through its Chinese subsidiary, which is regarded as a signal that Ant Financial Services will launch an IPO. Since 2015, Ant Financial has conducted at least five rounds of financing, but why did it choose to go public at this time?

Data source: A financial department compiled based on online data:

From July 14 to 15, 2017, the National Financial Work Conference was held, emphasizing financial security and pursuing progress while maintaining stability. General tone and financial legal system construction. On November 21, the Office of the Leading Group for the Special Rectification of Internet Financial Risks issued the "Notice on Immediately Stopping the Approval of Online Small Loan Companies", requiring an urgent suspension of the review and approval of online small loan licenses.

On December 1, “cash loan” supervision was implemented. The Office of the Leading Group for Special Rectification of Internet Financial Risks and the Office of the Leading Group for Special Rectification of P2P Internet Loan Risks jointly issued the "Notice on Standardizing and Rectifying the "Cash Loan" Business", setting three thresholds for the industry, with a comprehensive interest rate of less than 36%. License plates and on-site support.

On February 1, 2018, Alipay issued an announcement stating that in order to prevent the excessive growth of Yu’e Bao money market fund and maintain its long-term stable operation, Celestica Fund Management Co., Ltd. will start operations in February 2018. From the 1st to March 15th, the Yu’e Bao service rules will be adjusted and the daily total purchase amount will be set. During this period, the automatic transfer function is suspended, and users can try to transfer manually at 9:00 the next day.

The industry is tightening across the board. As the leader of Internet finance, Ant Financial cannot help but feel that winter is coming.

However, two small loan companies, Ant Small and Micro Loans (main business in North China) and Ant Commercial Credit (main business of borrowing), under Ant Financial, have issued asset-backed securities products with an issuance scale of reached 250 billion yuan, accounting for half of the Shanghai and Shenzhen stock markets.

As of June last year, the total on-balance sheet liabilities in North China reached 14.433 billion yuan, including 1.2 billion yuan in bank loans; the total on-balance sheet liabilities in North China reached 7.52 billion yuan, including 3.14 billion yuan in bank loans. But the total registered capital of the two companies is only 3.8 billion yuan. If calculated according to the ABS statement, the leverage ratio exceeds 80 times, which is much higher than the 2.3 times required by the Chongqing Municipal Finance Office.

As of the end of June 2017, Ant China North achieved operating income of 1.4 billion yuan and net profit of 1.02 billion yuan. It is reported that Ant Flower has gone beyond the Alibaba platform and has interconnected with more than 40 external consumer platforms such as Vipshop and Amazon. In addition, according to data disclosed by Ant Financial, the net profit of borrowers in the first three quarters has reached 4.5 billion yuan.

Consumer finance, especially cash loans, is the main source of profit for Ant Financial Services at this stage. Facing greater regulatory pressure, Ant Financial must plan for its future.

Ant Financial was launched by Alipay in 2004. In March 2013, Zhejiang Alibaba Agel E-Commerce Co., Ltd., the parent company of Alipay, announced the establishment of a small and micro financial services group to provide financial services. On October 16, 2014, Ant Financial was officially established to provide safe and convenient inclusive financial services to consumers and small and micro enterprises around the world.

Currently there are Alipay, Yu’E Bao, Magic Bao, Ant Treasure, Online Banking, Ant Flower, Sesame Credit, Ant Financial Cloud, Ant, etc.

Ant Financial’s business line is launched around Alipay. After Ant King Clothing occupied the third-party payment entrance, it relied on the massive data accumulated by the Taobao e-commerce platform to create a consumer finance empire based on the credit system.

In the field of mobile payment, WeChat Pay is a strong competitor of Alipay. On the surface, both of them are struggling in the payment field, but behind the scenes is the ecological dispute between Alibaba and Tencent. They all have the ambition to occupy the first place, and subsidy wars among them also come one after another.

The online and offline competition has spread from the competition for consumers, business outlets, commodities and supply chains to the competition for the entire financial business. Because it occupies the main traffic entrance, Ant Financial has the advantage of personal consumer finance, but Tencent's micro-bank also has very good consumer finance products available. Baidu Finance has a rising star trend through its focus on online and 2B.

JD.com’s first supply chain financial product, JD.com Baobei, has established service relationships with nearly 2,000 suppliers, and the trade volume of companies financing on JD.com has also increased by more than 200%. Giants are good at what they do, and they secretly fight with each other. They may overtake at any time.

Previously, Ant Financial’s plan to acquire Moneygram, the world’s second largest remittance company, was not approved by the Committee on Foreign Investment in the United States (CFIUS). The overseas merger and acquisition plan was once blocked because it involved U.S. financial institutions. and data security issues.

Due to the influence of many factors such as policy regulation, industry competition, and obstacles to going overseas, Ant Financial had to choose to go public at this time in order to get a share of the capital market when the industry winter is approaching.