Ant Financial’s aggressive strategy

CHINA ADVISORY - Report 19 Mar 2018 by Andrew Collier

Ant Financial operates through two businesses, Ant Credit Pay, which is a “virtual” credit card customers use to buy goods through Alibaba’s online platforms, and Ant Cash Now, which provides loans in cash issued directly to users who pay in installments with interest. The capital is supplied primarily through securitized loans sold to wealthy investors. We believe there are several significant risks to the business:
• Awkward Scalability. Ant Now’s loans, because they are in cash, are untraceable, so the default rate data used for Ant Credit Pay transactions are not available. This makes the scalability and control of Ant Cash Now’s business much more difficult.
• High Leverage. In order to scale the business, Ant Cash Now has created a high level of leverage through securitized loans. Currently, total outstanding credit, including off-balance sheet items, are estimated at nearly 49 times Ant Cash Now’s registered capital, far above the regulated limit of 2.3x.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.