AMTD Digital's Stock Price Surges, with Valuation Surpassing Alibaba

Financials Author: Hu Bi Aug 04, 2022 05:06 PM (GMT+8)

With only 50 employees, how does AMTD Digital support a market capitalization of USD 321.8 billion, even higher than that of Alibaba?

Financial Report

On July 15, AMTD Digital (Chinese: 尚乘数科, HKD:NYSE) went public on the Hong Kong Stock Exchange. After thirteen trading days, its stock price soared 222 times, with a market value of USD 321.8 billion, surpassing Alibaba's USD 245.4 billion and pushing closer to Tencent's USD 361.8 billion.

AMTD Digital is a digital finance company under the AMTD Group. According to public information, AMTD Group was founded by Li Ka-shing's companies in 2003, and its main businesses include asset management, investment banking and insurance brokerage. Its subsidiary, AMTD International, spun off its digital financial services and other businesses to become AMTD Digital. 

Earlier this year, a large share of AMTD Digital was acquired by AMTD International for USD 1.2 billion. Afterward, the acquiring company changed its name to AMTD IDEA Group. The new AMTD IDEA Group contains multiple business lines, including traditional financial services, digital tools, media and entertainment, and the SpiderNet ecosystem.

In terms of revenue, AMTD Digital's prospectus shows that it earned HKD 195.8 million in 2021. Among the four major business segments, the digital financial services business and the SpiderNet ecosystem solutions business contributed the majority of the revenue, especially the latter.

Some experts believe that the company is being overvalued. After the close of trading on August 1, AMTD Digital's rolling P/E ratio has reached 5,992 times. By way of comparison, the average P/E ratio of the S&P 500 is less than 20 times.