ANTMAn employee walks through the campus of the Ant Group Co. headquarters in Hangzhou, China, on Wednesday, Jan. 20, 2021.Qilai Shen | Bloomberg via Getty Images
Months after the sudden suspension of Ant Group’s highly-anticipated dual listing, China’s financial technology companies are facing difficulties trying to go public in the mainland, analysts told CNBC.
According to EY’s Asia-Pacific IPO leader, Ringo Choi, few firms in the fintech sector have managed to list on mainland exchanges in Shanghai and Shenzhen.
“For financial technology, you can see that … some of the largest one(s), if they’re competing with the bank or insurance company, they will have a hard time,” Choi told CNBC.
Last Friday, the China Securities Regulatory Commission announced a series of updated guidelines for companies seeking to list on the Shanghai’s STAR market — the Nasdaq-style tech board officially known as the Shanghai Stock Exchange Science and Technology Innovation Board.
One of the guidelines was that financial technology companies were banned from listing on the STAR board. “Real estate and firms mainly engaged in financial services and investment businesses are prohibited from listing on the Science and Technology Innovation Board,” the CSRC said in the release.
The latest development presents yet another obstacle for Chinese fintech companies looking to list on the mainland.
It comes weeks after Chinese e-commerce giant JD.com withdrew the planned listing of its financial technology arm on the STAR market.
The current IPO climate is a stark contrast to the situation less than six months ago, when a slew of Chinese start-ups were planning to list domestically. One such listing was the highly-anticipated public debut of Alibaba-affiliate Ant Group — poised at that time to become the world’s largest IPO.
Ant’s planned listing — set to take place in both Shanghai and Hong Kong — was abruptly shelved days before the debut after top executives including its founder and controller, Jack Ma, were summoned by Chinese regulators for questioning.
The unexpected suspension largely marked a turning point in Beijing’s stance toward its domestic technology giants including fintech firms, which had enjoyed largely unencumbered growth for years.
“The sentiment for this sector face(s) some questions,” Bruce Pang, head