Ant group disclosed risk factors: payment industry faces a lot of regulatory regulation

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Sina science and technology news on the afternoon of August 25, ant group submitted the listing prospectus (declaration draft) to the science and Technology Innovation Board of Shanghai Stock Exchange, and simultaneously submitted A1 application proof to the Hong Kong stock exchange, taking a key step of a + H listing.
According to the risk factors of the prospectus, ant group’s business relies on the trust of all participants in ant group, ant platform and ant brand. The failure to maintain, protect, strengthen and enhance the trust of all participants in ant or ant platform or ant brand will have a significant adverse impact on ant’s business, financial status, business performance and development prospects.
Payment industry is a strictly regulated industry in China. Ant group’s business has to face a large number of regulations.
The following are the risk factors disclosed in the prospectus of ant group:
Risks associated with our business and Industry
Our business relies on the trust of all participants in us, our platform and our brand. Failure to maintain, protect, strengthen and enhance the trust of all participants in us or our platform or our brand will have a significant adverse impact on our business, financial situation, operating performance and development prospects.
If we fail to innovate continuously, our business, financial condition, operating performance and development prospects will be significantly and adversely affected.
If we are unable to cope with or adapt to the rapid development of technology, our business, financial condition and operating results will be significantly and adversely affected.
If we fail to compete effectively, our business, financial condition, operating results and development prospects will be significantly and adversely affected.
If the participation and activity of consumers and businesses on the platform is reduced, or if we are unable to successfully promote our services, our financial performance and business may be seriously damaged.
Our success depends on our ability to maintain a win-win relationship with financial institutions.
If we fail to maintain and enhance the network effect of our platform, it may have a significant adverse impact on our business, financial condition, operating performance and development prospects.
We may not be able to maintain the level of revenue or business growth.
We may not be able to maintain the corporate culture on which success depends.
Our business generates and processes large amounts of data, including personal and business information, and improper collection, custody, use or disclosure of data may damage our reputation and have a material adverse impact on our business and development prospects.
The new outbreak poses challenges to our business and the impact of the epidemic may have an adverse impact on our business, financial condition and results of operations.
Our business operations and financial condition may be significantly and adversely affected by the slowdown in China and the global economy.
We and our partners are subject to a wide range of laws and regulations, and future laws and regulations may impose additional requirements and other obligations, which may have a material adverse effect on our business, financial condition and operating performance.
The financial services industry is subject to a wide range of evolving regulations.
Our licensed financial services subsidiaries and associated companies are subject to growing and extensive regulations.
Any potential conflicts that may arise between us and Alibaba, if not properly resolved, may have a significant adverse impact on our business, financial condition, operating performance and development prospects.
Geopolitical conflicts have led to tension in Sino US relations, and this adverse trend is likely to continue, which may have a negative impact on our business and operating performance.
We focus on long-term performance as well as long-term strategic initiatives and investments, which may affect our short-term business performance.
We have to face a lot of regulations in the payment industry in China.
Our business may be adversely affected by new initiatives in the Chinese payment industry.
Changes in payment network rules may adversely affect our business, financial condition and results of operations.
Fraud and fraudulent transactions pose serious challenges to our risk management capabilities, and failure to identify and manage the risks associated with such transactions may adversely affect our business, reputation, financial condition and results of operations.
Worldwide regulatory and legislative activities directly related to the payment industry may have a significant adverse impact on our overall business and results of operations.
If the transaction costs we pay to financial institutions grow faster than our revenues, our profitability may be negatively affected.
With the continuous development of Chinese laws and regulations governing online lending and consumer finance business, we have adjusted and may need to continue to adjust our business operations to ensure full compliance with relevant laws and regulations.
Our micro loan technology platform business may not be able to maintain the rapid growth in the past.
The loan performance that we facilitate through the platform is limited by the credit cycle.
We rely on partners of financial institutions to carry out micro loan technology platform business.
Our ability to provide consumer credit and credit for small and micro businesses through the platform is, to some extent, affected by the state of China’s asset-backed securities market.
Our intelligent business decision system and dynamic risk management system may not be able to effectively assess or reduce the credit risk of loans facilitated through our platform.
Our own and third-party service provider collections may be ineffective or considered improper.
Our licensed microfinance subsidiaries are exposed to credit loss risk.
Our associate, e-commerce bank, is our most important partner in providing services to small and micro businesses. If e-commerce banks are unable to adapt to changes in policies, laws and regulations related to China’s highly regulated banking industry, our business, financial situation, operating performance and development prospects may be significantly adversely affected.
The regulatory environment of China’s asset management industry is constantly developing, and we may be affected by changes in relevant laws and regulations and government policies.
If we fail to effectively match the right financial products for our customers, our reputation, business, financial condition and operating performance as a reliable platform may be significantly adversely affected.
If we are unable to continuously expand the products on the platform or our asset management partners are unable to provide customers with high-quality and attractive products, or can not effectively manage risks, our wealth management technology platform business may be significantly adversely affected.

China’s insurance industry is strictly regulated. Failure to comply with evolving laws and regulations may have a material adverse effect on our business and development prospects.
If we fail to continuously innovate and co innovate with our insurance partners to provide new insurance products, or if the relevant innovative products are not commercially feasible, it may have a significant adverse impact on our reputation, business, financial condition and operating performance.
Our mutual aid program is subject to potential regulatory and business risks.
We rely on our partners to provide reliable and quality products and services, and we may not be able to manage them effectively.
We are faced with complex laws and regulations related to the protection of data and privacy both at home and abroad. These laws and regulations may be complex and strict, and most of them have the possibility of change and the uncertainty of interpretation, which may lead to changes in claims, data security and privacy practices or other business activities, fines, increase in operating costs or decrease in user growth and participation, which may have a negative impact on our business.
If we or our digital payment and digital financial services partners fail to comply with applicable laws and regulations on anti money laundering, anti terrorist financing and economic sanctions, it may result in huge fines and damage to our reputation.
If we are unable to cope with major management, operational and financial challenges in the course of business and operational development, we will be harmed.
We may face risks associated with acquisitions, investments and business partnerships.
We may face challenges in expanding our cross-border business and operations, and we may not be able to successfully expand our cross-border payment business.
A number of aggressive and misleading third-party marketing and publicity strategies may damage our reputation, brand and business.
Failure to maintain or improve the technology infrastructure will damage our business and development prospects.
Security intrusions and attacks against our systems and networks, as well as any possible loopholes or inability to protect personal, confidential and proprietary information, will damage our reputation and have a negative impact on our business, and will have a material adverse impact on our financial position and operating results.
The success of our business depends on the performance, reliability and security of the Internet infrastructure in China and other countries where we operate.
Our platform may be suspended due to system failure, downtime and network interruption.
We usually rely on key management and experienced and competent personnel. Failure to attract, motivate and retain employees will seriously weaken our ability to maintain and develop our business.
If we fail to deal effectively with fraud or illegal activities of our employees, it will damage our business.
We may not be able to fully protect our intellectual property rights; third parties may accuse us of infringement of their intellectual property rights.
Legal proceedings against us may damage our reputation and may have a material adverse effect on our business, financial condition, operating results and development prospects.
Accusations or regulatory actions against us on antitrust and unfair competition may result in fines, business restrictions and damage to our reputation.
Failure to comply with any of our debt restrictive commitments may adversely affect our cash flow and liquidity.
We may not be able to get financing on preferential terms or at all.
We have granted and may continue to grant restricted share units, stock appreciation rights or other types of share based payment awards in accordance with our equity incentive plan, which may lead to an increase in share based payment expenses, dilution of shareholders’ equity and a decrease in the price of our H shares.
We may not have enough coverage to cover the risks of our business.
In the event of a massive epidemic or other outbreak, severe weather or natural disasters, it may have a material adverse effect on our business, financial condition and results of operations.
Risks associated with China
China’s economic, political and social environment, as well as government policies, may affect our business, financial position and results of operations.
Your choice of legal protection under the Chinese legal system may be limited.
It may be difficult for you to serve process documents and enforce judgments on us and our management.
You may have to pay mainland China tax.
The payment of dividends is restricted by Chinese law.
We are subject to currency exchange controls by the Chinese government and are subject to the risk of future exchange rate fluctuations.
Risks related to H shares
There was no open market for our H shares in the past, and the circulation and market price of H shares may fluctuate.
We are carrying out independent A shares at the same time, and the characteristics of A-share market and H-share market are different.
Future large or anticipated sales of our shares in the open market, or the conversion of a shares into H shares, may have a material adverse effect on the then market price of our H shares and our ability to raise additional capital in the future.
There was no open market for our H shares in the past, and the circulation and market price of H shares may fluctuate.
As the value of H shares is higher than the consolidated net tangible assets per share, the buyers of H shares may be diluted immediately after purchase.
We cannot guarantee whether and when the dividend will be paid in the future.
Some of the facts and statistics contained in this document derived from public and third-party information may not be reliable, and the data provided by iResearch and Ogilvy depend on a number of assumptions and methods.
We solemnly remind you not to rely on the information contained in newspapers or other media on our A-shares and H-shares, nor on the information published by us on a shares.