Why Beijing put a stop to the Ant IPO

Ant's initial public offering was supposed to be the biggest listing in history. Then new regulations in China turned the IPO from a seemingly sure thing into the biggest misstep for capital markets of 2020. So, did Beijing squash a great deal or were regulators just looking out for the little guy?
China's biggest financial technology group had planned to start trading its shares on Thursday, November 5th in Shanghai and Hong Kong. But just days before it was set to list, Shanghai's stock exchange slammed on the brakes. A day earlier, regulators had announced new draft measures for online micro-lending, which makes up almost 40% of Ant's revenue. In the lead up to the IPO, Ant tried to brand itself as a tech company, even going so far as to remove 'financial' from its name. But the message was clear. Ant's future would depend on China's banking regulators. The same ones Jack Ma had criticized a few days earlier in an outburst that earned him a dressing down from Beijing.
WHAT ARE THE NEW RULES?
The draft rules mean that Ant and other online lenders will be treated much more like banks. They will have to hold significantly more capital to back loans made on their platforms, and there will be a cap on how much they can lend to each individual. Ant's payment platform, Alipay, is ubiquitous in China, but its fast-growing consumer lending business was the real driving force behind the IPO. The business acts as a high-tech matchmaker between borrowers and banks, taking an estimated fee of about 2.5% for each loan it arranges. But Ant took almost none of that risk on from 1.7 trillion Renminbi in consumer loans. Now, analysts say the new rules could force it to provide much more of the capital itself and hold far more of those loans on its own books. One analyst estimates that the share of loans on the company's books could shoot to 20% if Ant is treated like other lenders in China. That is music to the ears of China's biggest state banks, who have long been critical of Ant's business model.
HOW WILL ANT'S VALUATION CHANGE?
For investors who had been salivating over Ant's $37 billion IPO, the new rules sent a signal that Ant's business model would have to change drastically from the one it had pitched during its roadshow. Ant's price-to-earnings ratio, which measures how much investors are prepared to pay for each dollar or Renminbi of earnings and is a key metric of profitability, would have clocked in at a very techy 48 times based on its IPO pricing. Banks, however, are generally valued under 10 times earnings. Treating Ant like a bank would almost certainly bring its P/E ratio dramatically lower. And with it, the funds the company could expect to raise through a listing.
WERE REGULATORS RIGHT TO SUSPEND THE LISTING?
The $37 billion question is whether Beijing was right to pull the IPO. Regulators had to determine whether the benefits of Ant's lending practices were worth the increased risk in China's financial system. Once they had decided it wasn't, the next call was whether they wanted to upset Jack Ma, the company, and the institutional investors who had backed the listing, or the hordes of retail investors who had bought into the IPO and were set to take a serious loss when shares started trading. Once the decision was made to treat online lenders more like banks, the heavy buy-in from retail investors probably made pausing Ant's listing inevitable. But by doing so at the last minute, regulators have upset pretty much everyone and raised questions about why they waited to step in until the 11th hour. Ant, meanwhile, has to meet a host of new requirements and explain why it deserves a rich valuation when Beijing plans to treat it like a run-of-the-mill lender. Whichever side you're on, nobody really comes out of this deal looking good, and when Ant does finally go public, investors aren't likely to forget the biggest capital markets debacle of 2020.

蚂蚁集团的首次公开募股本应是历史上规模最大的上市。但随后，中国出台的新规将这次IPO从一个看似板上钉钉的事件，变成了2020年资本市场最大的失误。那么，是北京扼杀了一笔大买卖，还是监管机构只是在保护小散户？
中国最大的金融科技集团原计划于11月5日星期四在上海和香港开始其股票交易。但在即将上市的前几天，上海证券交易所紧急叫停。一天前，监管机构宣布了新的线上小额贷款管理办法草案，而这部分业务占了蚂蚁集团近40%的收入。在IPO筹备期间，蚂蚁集团试图将自己定位为一家科技公司，甚至从公司名称中去掉了“金融”二字。但传递的信息很明确。蚂蚁的未来将取决于中国的银行业监管机构。而就在几天前，马云还批评过这些监管机构，这次言论激烈的批评为他招来了北京方面的训诫。
新规是什么？
规则草案意味着蚂蚁集团及其他线上贷款机构将被更多地视作银行来对待。它们必须持有更多资本金来支持其平台上的贷款，并且对每个个人的放贷额度也将设置上限。蚂蚁的支付平台支付宝在中国无处不在，但其快速增长的消费者借贷业务才是这次IPO背后的真正驱动力。该业务扮演着一个高科技的撮合者，连接借款人和银行，并对每笔撮合的贷款收取约2.5%的费用。但在1.7万亿人民币的消费者贷款中，蚂蚁几乎没有承担任何风险。现在，分析师表示，新规可能会迫使其提供更多自有资金，并将更多贷款计入自己的账本。一位分析师估计，如果蚂蚁被视作中国其他贷款机构一样对待，其账面上的贷款份额可能会飙升至20%。这对中国最大的几家国有银行来说是天大的好消息，它们长期以来一直对蚂蚁的商业模式持批评态度。
蚂蚁的估值将如何变化？
对于那些对蚂蚁集团370亿美元IPO垂涎已久的投资者来说，新规发出了一个信号：蚂蚁的商业模式将不得不与其路演时所宣传的模式发生巨大改变。蚂蚁的市盈率（衡量投资者愿意为每一美元或人民币收益支付多少钱，是衡量盈利能力的关键指标）本应根据其IPO定价达到非常具有科技公司特色的48倍。然而，银行的估值通常在10倍市盈率以下。将蚂蚁视作银行几乎肯定会使其市盈率大幅下降。随之而来的是，公司通过上市所能筹集的资金也将大幅减少。
监管机构暂停上市是对的吗？
这个价值370亿美元的问题在于，北京叫停这次IPO是否正确。监管机构必须确定，蚂蚁的贷款业务带来的好处是否值得中国金融系统为此承担增加的风险。一旦他们认定不值得，下一步就要决定是得罪马云、公司以及支持此次上市的机构投资者，还是得罪那些已经认购IPO、并准备在股票开始交易时承受严重损失的大批散户投资者。一旦决定将线上贷款机构视作银行来对待，来自散户投资者的巨额认购可能使得暂停蚂蚁上市变得不可避免。但通过在最后一刻采取行动，监管机构几乎得罪了所有人，并引发了人们的疑问：为什么他们要等到最后一刻才介入。与此同时，蚂蚁集团必须满足一系列新要求，并解释为何在北京计划将其视作一个普通的贷款机构时，它仍值得拥有如此高的估值。无论你站在哪一边，在这场交易中，没有人能真正体面收场。而当蚂蚁最终上市时，投资者们也不太可能忘记2020年这场最大的资本市场灾难。