How Ant Group Reinvents Imagination (Part 2): Two key licenses that are not going well

If needed, Alipay can be handed over to the state - Ma Yun

The author mentioned in the article "Ants, Qi Deficiency, Strong Bones" that the foundation of Ant Group is users, data and traffic, and these are not brought by credit business, but by the entire ecology of payment, life and financial technology, and credit business is nothing more than the monetization method of ants.

Although the author still adheres to the original view, I have to admit that credit is the best way to monetize data.

To reverse the decline, Ants must solve the problem of micro-credit technology platforms.

There are only two options: keep the credit business or find a replacement for the credit business.

For the first solution, in fact, Ant's micro-loan technology platform has always had a better solution to "let the online business bank carry this part of the business", but if it is done, ant can only have 30% of the income.

Secondly, the consumer finance license with higher gold content than online small loans and a higher proportion of income than online commercial banks has become a plan for survival with a broken arm.

Ant Group accounts for 50% of the equity of the consumption company, although the proportion of income has decreased significantly, but compared with the service bank lending, Ant Consumption Gold lends itself, takes on greater risks, and naturally will share more cake, with the continuous increase in capital, the total income may be the same as before the rectification or even higher.

Everything seems to be developing in a good direction, but the unexpected has arrived as scheduled - just at the beginning of the year, China Cinda, Yuyue Medical and other institutions subscribe to Ant Consumer Finance equity plan has changed.

There is also some bad news coming from the public opinion field.

Some media have exposed that the relevant state-owned enterprises and banks in the mainland have received a notice that a new round of comprehensive investigation of the relevant business of ant group will be carried out in order to find out the investment and other associations of these state-owned enterprises in ant group.

According to the first consumer finance: the well-known consumer loan giant Company A continues to be restricted in the scale of consumer loan management, at present, Company A through its consumer loan products B and product C management scale has been reduced to less than one trillion. The regulator's first goal for the company's management scale is to reduce it to 350 billion yuan. Who consumer loan giant A is, is obvious.

The second solution, Qiantang credit is naturally the best carrier.

In July 2021, the Credit Bureau of the People's Bank of China issued a notice to online platform institutions, requiring online platforms to achieve a comprehensive "disconnection" between personal information and financial institutions, and the past uncrowned king "Sesame Credit" could not continue to run naked, and the situation was more severe than after the Bund Summit in 2020.

Personal credit reporting licenses are imminent.

With the strength of the ant, the participation in the personal credit reporting license is not a problem, but the problem lies in the nature of "participation".

In 2015, eight institutions such as Zhima Credit had applied for a personal credit reporting license together, and the initial planning time was six months, but three years later, in January 2018, the news that Baixing Credit was approved, the China Internet Finance Association was the largest shareholder, and the previous eight institutions did not obtain licenses, and only held 8% of the shares in Baixing Credit.

Since then, the media has repeatedly reported that Tencent and Ant are unwilling to hand over the data to Baixing Credit. The logic behind this "unwillingness" is well understood, the proportion of equity is also the proportion of income rights, the amount of data between Tencent and Ant is completely different from other small shareholders, and the rights and obligations are completely unequal.

In fact, it is not only the hundred lines of credit, even the central bank credit report wants the data of the giants is not so easy.

In 2020, Reading Digital Finance has issued an exclusive article: "Huabei data is gradually accessing the central bank's credit information The future will cover all users", the article pointed out: Huabei's access to the central bank's credit report "late" is not a case, many Internet giants' credit payment products have also chosen "late", such as Jingdong Digital, which also recently launched an IPO, also began to access the central bank's credit report in batches in 2019.

A person familiar with the matter said that "the giant's consumption staging business in the past was small, and it didn't matter whether it was connected to credit supervision or not, and then the scale was too large, and there was a pressure to enter the credit report, and it could only take the way of entering the credit report in batches." ”

As a result, this move began to gradually access credit reporting from 2019, and it has not ended in 2021, and in September 2021, a wave of "Huabei into credit" reports broke out again.

On the one hand, credit reporting will affect the experience and willingness of some users to use and reduce competitiveness; on the other hand, data is a valuable asset, especially for credit business, credit reporting means that the giant's data should be shared with all financial institutions, and the charging party will become a personal credit reporting agency instead of a giant.

Park Dao Zhengxin, which was established after Baixing Credit, is also a state-owned asset, with Beijing Financial Holdings as the largest shareholder, and jd.com technology, millet and other companies holding the shares in the back.

When it came to Qiantang Credit, there were some changes.

On November 26, 2021, the central bank accepted the personal credit reporting business application of Qiantang Credit Investigation Co., Ltd., according to the annex information published by the central bank: the registered capital of Qiantang Credit Co., Ltd. is one billion yuan, and Ant Group and Zhejiang Tourism Investment Group Co., Ltd. hold 35% of the shares.

On the surface, ants are the same as state-owned assets, which is already a precedent, but the third largest shareholder has added some mystery to Qiantang Credit.

Hangzhou Xishu Enterprise Management Partnership (Limited Partnership) is an employee shareholding platform and the third largest shareholder of Qiantang Credit, and the registered address of the company is 402-9, Section C, 4th Floor, Ali Center, No. 556 Xixi Road, Xixi District, Hangzhou, Zhejiang Province; secondly, the major shareholder of Hangzhou Xishu and the chairman of the Supervisory Board of MYbank are called Dong Zhanbin, and the minority shareholders and an investment manager of Ant Financial are called Kong Lingren, whether this is a coincidence is not yet known. The two intend to serve as the president and financial leader of Qiantang Credit.

If both of them are from online banking and ant groups, the pattern of interests behind this has become somewhat confusing. But in reality, it's also a win-win solution – Ant Group can operate with a license and get more benefits, and the data can also shine in a more open market.

If the two just have nothing to do with the ant group, the author can only admire the pattern and mind of the ant.

However, there is some uncertainty about whether Qiantang Credit Can Be Established.

Article 9 of the Measures for the Administration of Credit Reporting Institutions also clearly states that "Chinese Bank shall examine the application matters within 60 days from the date of accepting the application for the establishment of the individual credit reporting agency, and make a decision to approve or disapprove it in accordance with the principle of prudence conducive to fair competition and healthy development of the credit reporting industry." Where a decision is made for approval, a personal credit reporting business license is to be issued in accordance with law; where a decision is made not to approve it, a written decision shall be made. ”

Obviously, the Qiantang Credit Bureau, which applied for establishment in November last year, has already passed the "60-day" time limit, what happened during this period? No one knows, but what is certain is that the two roads for Ant Group to reshape its imagination are bumpy, and after the credit hit, Ant Group's profitability has also encountered unprecedented challenges.

In the third quarter of 2021, the media calculated that ant group's net profit in the third quarter of 2021 was about 17.609 billion yuan based on Alibaba's financial report, and one detail that cannot be ignored is that ant group's net profit in the third quarter was largely affected by investment income: India's life service platform Zomato and Indonesian e-commerce company Bukalapak.

How much contribution do the two foreign companies have to the performance of Ant Group?

Some market participants commented that Ant Group, as an early investor, holds 14% and 13% of the shares in Zomato and Bukalapak respectively, even if conservatively calculated according to the double income, the book investment income obtained by Ant from the two companies in July and September last year may be more than 6 billion yuan, and the person estimated that the operating net profit of Ant in the current period is much lower than the figure calculated according to Ali's financial report, and the actual net profit may drop by more than 40% month-on-month.

The author also made some calculations and found that the investment income contributed by two foreign companies to the ants in the third quarter was probably more than analysts expected.

And in the fourth quarter, Bukalapak's stock price suffered a slash, which means that the company is no longer a boost to the performance of Ant Group in the fourth quarter, but may pull down Ant's net profit in the fourth quarter. (For details, read "Bukalapak's share price cut in the fourth quarter of last year, will it drag down Ant Group's performance in the next quarter?") 》）

To sum up, regardless of investment income, Ant's performance in the third quarter of 2021 is getting worse, and the fourth quarter may be worse.

Ant Group has gathered one of China's best "strike workers", and above them are a group of capable executives with deep resource backgrounds, and it is difficult to imagine any business problems that this business dream team cannot solve.

Since it has not been solved, it must not be a simple business problem.

How do ants reinvent the imagination? In fact, the standard answer is given at the beginning of this article.