One article understands ant pricing: 68.80 yuan per share, market value of 2.1 trillion yuan, the world's largest IPO

 The initial inquiry of Ant Group's IPO is completed, and the final A-share issue price is determined to be 68.8 yuan per share, with a total market value of 2.1 trillion yuan. Before the A-share over-allotment option is exercised, the total amount of funds raised by the issuer is expected to be 114.945 billion yuan; The over-allotment option is exercised in full, and the issuer is expected to raise a total of 132.186 billion yuan.

Ant Group's A+H share IPO plans to raise approximately US$34.5 billion, which corresponds to a 2019 P/E ratio of 96.48 times deducting non-net profits, making it the world's largest IPO.

The following are key points related to Ant Group's IPO pricing:

Ant Group issue price: A shares 68.80 yuan H shares 80.00 Hong Kong dollars

Based on the preliminary inquiry results, Ant Group negotiated and determined the A-share issuance price at 68.80 yuan per share, and the A-share issuance scale was 114.945 billion yuan (before the exercise of the A-share over-allotment option). The H-share issuance price is 80.00 Hong Kong dollars per share, which is approximately RMB 68.85 per share. The initial public offering of H shares is 1,670,706,000 shares, and the issuer grants the joint bookrunners of H shares an over-allotment option not exceeding 15.00% of the initial public offering of H shares.

Ant IPO subscription: Science and Technology Innovation Board subscription on the 29th

The online subscription code for Ant Group's sci-tech innovation board is "787688". Investors will subscribe online and offline on October 29, 2020 (T day). There is no need to pay subscription funds when subscribing. Each subscription unit is 500 shares, and the subscription quantity should be 500 shares or an integral multiple thereof, but the maximum shall not exceed one thousandth of the number of initial online shares (including the over-allotment option), which is 317,000 shares. Before the launch of the online and offline call-back mechanism, and before the A-share over-allotment was launched, the online initial issuance was 66,828,000 shares, accounting for 20.00% of the initial issuance of A shares after deducting the initial strategic allotment. Before the launch of the online and offline call-back mechanism , After the A-share over-allotment is activated, the initial online issuance number is 317,433,500 shares, accounting for 54.29% of the A-share issuance after deducting the initial strategic allotment.

Ant Group's H-share IPO will be held from October 27th to October 30th, 2020. The company plans to issue 1.671 billion H-shares, with a public offering accounting for 2.5%, international placements accounting for 97.5%, and 15% over-allotment rights. The issue price of H shares is 80 Hong Kong dollars per share, with 50 shares per lot, and is expected to be listed on November 5.

Ant IPO funds raised: 34.5 billion US dollars

Ant Group calculates based on the current issue price of 68.80 yuan/share. Before the A-share over-allotment option is exercised, the total amount of funds raised by the issuer is estimated to be 114.945 billion yuan; if the A-share over-allotment option is fully exercised, the total amount of funds raised by the issuer is expected It is 132.186 billion yuan. The A+H share IPO plans to raise approximately US$34.5 billion.

Ant IPO strategic placement

The initial strategic placement of the A-share issuance is 1,336,564,800 shares, accounting for 80.00% of the initial issuance of A-shares, and approximately 69.57% of the total number of A-shares issued after the full exercise of the A-share over-allotment option.

The final strategic placement quantity of this issuance is 1,336,564,800 shares. Because the final strategic placement quantity is the same as the initial strategic quantity, there is no return to offline. Based on the issuance price of RMB 68.80 per share negotiated by the issuer and the joint lead underwriters, the size of the A-share issuance is RMB 114.945 billion (before the exercise of the A-share over-allotment option).

The scale of this A-share issuance exceeds RMB 5 billion. According to the “Business Guidelines”, the co-sponsor’s related subsidiaries shall not exceed 2.00% of the number of A-share issuance, and the subscription amount shall not exceed RMB 1,000 million. yuan.

According to the listing announcement of Ant Group, strategic investors paid a total of 93.531 billion yuan. Among them, Tmall Technology Co., Ltd. paid 51.145 billion yuan.

Social Security Fund invests 7 billion ants

This announcement also disclosed for the first time Ant’s strategic investor lineup for IPO on the Sci-tech Innovation Board, covering 29 top investors at home and abroad, including top sovereign funds, top domestic insurance companies, banks, large state-owned enterprises, and private enterprises. A shares bring stable long-term funds.

It is worth noting that the Social Security Fund has become the largest strategic investor in Ant Group except Alibaba Group. The announcement shows that the Social Security Fund has invested an additional 7 billion yuan and subscribed for more than 100 million new shares of Ant.

Ant IPO over-allotment option

CICC will act as the authorized lead underwriter for the specific implementation of the over-allotment option operation for this issuance.

The issuer granted CICC’s A-share over-allotment option. CICC will over-allot 15.00% (250,605,500) of the initial issuance of A shares to investors at the issuance price. 115.00% (1,921,311,500 shares) of shares were issued, and the final over-allotment situation was determined by the joint lead underwriters on October 30, 2020 (T+1) in the "Ant Technology Group Co., Ltd. Initial Public Offering and Listing on the Science and Technology Innovation Board" Announcement on Online Issuance Subscription Status and Winning Rate Announcement (hereinafter referred to as "Online Issuance Subscription Status and Winning Rate Announcement").

Over-allotment stocks will be obtained through deferred delivery to some strategic investors in this issuance, and all of them will be allotted to online investors.

The final market value of Ant Group's IPO is 2.1 trillion yuan

Ant Group issued an initial public offering and listing on the Science and Technology Innovation Board. The issuer and the joint lead underwriters negotiated and determined the issue price of 68.80 yuan per share based on the preliminary inquiry results. Calculated at this price, the final total market value of the A-share issuance is 2.1 trillion yuan, which is a discount of about 20%-30% compared to the previous estimate of 2.5 trillion-3 trillion yuan by many investment banks.

Alibaba subscribes for 730 million A shares of Ant Group

Alibaba announced in the evening that the company subscribed for 730 million A shares of Ant Group at an issue price of RMB 68.8 per share. The total consideration for the subscription is approximately 50.2 billion. After the issuance, Alibaba expects to hold approximately 31.8% of Ant Group's equity, or 31.2% of the equity (if the underwriters fully exercise the option to subscribe for additional shares under the A-share issuance and H-share issuance).

Ant Group issue price-earnings ratio

The corresponding price-earnings ratio for the issue price of 68.80 yuan/share is:

(1) 96.48 times (earnings per share are calculated based on the net profit attributable to the owners of the parent company before deducting non-recurring gains and losses audited by an accounting firm in accordance with Chinese Accounting Standards in 2019 divided by the total share capital before the issuance);

(2) 123.25 times (Earnings per share shall be divided by the net profit attributable to owners of the parent company before non-recurring gains and losses audited by an accounting firm in accordance with the Chinese Accounting Standards in 2019 divided by the over-allotment option for A shares and H shares Calculation of the total share capital after the issuance of A shares and H shares);

(3) 125.28 times (Earnings per share is based on the net profit attributable to owners of the parent company before deducting non-recurring gains and losses audited by an accounting firm in accordance with Chinese Accounting Standards in 2019 divided by the assumption that both A shares and H shares are fully exercised in excess Calculation of the total share capital after the issuance of A shares and H shares at the time of the placement option);

(4) 120.31 times (earnings per share are calculated based on the net profit attributable to owners of the parent company after deducting non-recurring gains and losses audited by an accounting firm in accordance with Chinese Accounting Standards in 2019 divided by the total share capital before the issuance);

(5) 153.69 times (Earnings per share is based on the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses audited by an accounting firm in accordance with Chinese Accounting Standards in 2019 divided by when the A-share and H-share over-allotment options are not considered Calculation of the total share capital after the issuance of A shares and H shares);

(6) 156.22 times (Earnings per share is based on the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses audited by an accounting firm in accordance with Chinese Accounting Standards in 2019 divided by the assumption that A shares and H shares are fully exercised over-allotment At the time of option, the total share capital after the issuance of A shares and H shares is calculated).

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