Tag Archives: Yu’ebao

FINANCE: Jack Ma’s Yu’ebao Fund Gets Too Fat

Bottom line: Yu’ebao’s further lowering of investment limits shows the Ant Financial-owned fund is growing too unwieldy, and the company would be better advised to diversify its wealth management product portfolio.

Yu’ebao gets too fat on cash

Alibaba (NYSE: BABA) founder Jack Ma is quickly discovering that his super-aggressive promotional ways can sometimes yield too much success. That’s my quick assessment of the bottom line from reports that Yu’ebao, the phenomenally successful fund launched by Alibaba’s former financial unit Ant Financial, is further capping the size of individual investments it will take.

The new cap is being set at a relatively low 100,000 yuan ($15,000), and comes just three months after Ant set an initial upper limit of 250,000 yuan per individual Yu’ebao account. The limits are clearly being put in place to avoid Yu’ebao spiraling out of control, as the fund has already become the world’s largest just four years after its launch. Read Full Post…

FUND RAISING: Alibaba’s Ant Chases New Funds in March to IPO

Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.

Ant Financial raises new funds

Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.

Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…

FINANCE: New Investment Squashes Ant Financial Valuation

Bottom line: Ant Financial’s valuation looks low but reasonable based on its first major fund raising, and the figure is like to triple or more by the time it makes its domestic IPO in around the next 2 years.

Ant Financial gets low valuation in new funding

After months of negotiations, Alibaba (NYSE: BABA) affiliated financial services unit Ant Financial has finally closed its first major funding round as it revs up a campaign to challenge established state-run banks. But what most surprised me in the latest reports were the low valuation that Ant got from the funding, with the final figure coming in far below all of the earlier forecasts.

The moral of the story is that Ant Financial and other similar privately funded financial services companies still have big potential. But limitations that restrict such companies from seeking foreign investment are likely to limit their valuations, since only a small field of domestic Chinese institutional investors have big enough sums of money to finance high-growth companies like Ant. Read Full Post…

FINANCE: Alibaba, SMG Try Crowd-Funded Film Finance

Bottom line: China’s regulators should work closely with innovators like Alibaba and SMG to minimize the risk from their new financial products that bring small lenders and borrowers together.

Alibaba, SMG partner on film finance

E-commerce giant Alibaba (NYSE: BABA) made its latest advance in the financial realm last week, announcing a major tie-up with Shanghai’s leading broadcaster to promote film finance over its online platform based on the crowd-funding concept. The move extends Alibaba’s recent forays into both entertainment and finance, and could provide a major boost for smaller Chinese movie makers who often lack access to project funding.

But the reality is that movie making is a highly risky business for even the most experienced companies, and smaller productions are famous for losing money. That means many of the projects that get financed through the new Alibaba tie-up with Shanghai Media Group (SMG) may ultimately see investors lose some or all their money if and when poorly conceived projects fail to find an audience. Read Full Post…

FINANCE: SOEs Squash Ant Financial Valuation

Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.

SOEs squeeze Ant Financial’s valuation

Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.

But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…

News Digest: October 17, 2014

The following press releases and media reports about Chinese companies were carried on October 17. To view a full article or story, click on the link next to the headline.
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  • Ant Financial Set Up With Alibaba Assets Alipay, Yu’ebao And Others (Chinese article)
  • Spring Airlines To Become First Public Low-Cost Carrier With IPO By Year End (Chinese article)
  • Internet Giants’ Brawl Ends With Qihoo (NYSE:QIHU) Final Loss To Tencent (English article)
  • McDonald’s (NYSE: MCD) Hits Snag In China Expansion With Franchisee Dispute (Chinese article)
  • Inspur Wins China Telecom Server Tender (English article)
  • Latest calendar for Q3 earnings reports (Earnings calendar)

Alibaba Makes Peace With Banks In Lending Tie-Up

Alibaba in new alliance with banks

A year after it shook up China’s stodgy banking sector with the launch of its Yu’ebao savings product, e-commerce leader Alibaba looks set to give the market another shot of needed innovation in a new tie-up with 7 major banks. This time the aim is to promote lending to small and medium-sized enterprises (SMEs), with a focus on manufacturers and especially exporters. Such companies often have difficulty getting loans from traditional banks for reasons I’ll explain shortly. Thus this new partnership aims to use Alibaba’s mountains of financial data on these smaller companies to help the banks better understand underserved SMEs that are a critical player in China’s economy. Read Full Post…

Regulators Become Mediators As Internet Firms Encroach

Regulators in new role as judges for industry clashes

China’s regulators have become involved in mediating a growing number of business disputes, reflecting the recent rise of a new generation of multibillion-dollar private sector companies that are rapidly growing beyond their traditional roots. In most cases, companies that began as Internet firms and high-tech manufacturers have encroached into a wide range of new areas like banking, TV and telecoms services, raising the hackles of big state-owned firms that previously dominated those sectors. Read Full Post…

Yu’ebao Slowdown, Aug 8 Listing For Alibaba

Alibaba eyes double 8 listing date

Newly released data are showing an inevitable slowdown at Yu’ebao, Alibaba’s inaugural financial product that has shaken up China’s stodgy banking industry since its launch a year ago. The data released by Alibaba’s Tianhong Asset Management, which officially runs Yu’ebao, also shows the product’s return rate has dropped considerably from earlier levels, which will further undermine its attractiveness. Separately, media are reporting that Alibaba has tentatively chosen the date of August 8 for its highly anticipated New York listing, which had been previously rumored due to its significance as a lucky day on the Chinese calendar. Read Full Post…

News Digest: July 2, 2014

The following press releases and media reports about Chinese companies were carried on July 2. To view a full article or story, click on the link next to the headline.
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China Telecom Joins Banking Rush

China Telecom jumps on financial bandwagon

Wireless carrier China Telecom (HKEx: 728; NYSE: CHA) was in the headlines last week with its launch of a financial product similar to savings accounts, becoming the latest in a long string of companies to enter an area dominated for decades by state-run banks. At the same time, separate reports said the central bank was nearing a plan to introduce its first major regulation of these new products, in another widely expected move. Read Full Post…