Alibaba's spinoff is working its way through the Star Market IPO pipeline, and facing inquiries from the oversight body in charge of applications.
On September 9, the Star Market released the second reply from Ant Group to the China Securities Regulatory Commission (CSRC) with regards to factors such as regulation, market competition, share-based payments and H shares disclosure.
In terms of the new and stricter regulations that place a protective upper-limit on the interest rates of private lending, Ant Group has stated that it will increase the compliance cost – but that it has no material effect on the company’s capacity for continuous operation.
Also, even though many companies are providing similar services in the digital payment field, such as Tencent WeChat Pay, Ant Group replied that there are actually no comparable firms in play, as the company targets merchants' services, which is different from business services. In the fintech domain, Ant Group has its own innovative way of cooperating with financial institutions, negotiating service provision and revenue-generating through shaping its own models. Taking into account its leading position in blockchain and cloud technology as well, Ant seems justified in seeing no comparable firms out there.
As for share-based payments to the Alibaba Group, Ant says it is part of the cooperation between both sides, instead of an extra incentive, and has no material effect.
Furthermore, according to Ant, the disparities between the disclosure in the prospectus on Shanghai’s Star Market and the one filed for Hong Kong Stock Exchange are present because of regulation and formal composition differences and have no "material discrepancy."