Two questions: what does ant group make money on? How does retired Ma Yun control?

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By Doraemon
Source: ID: sycaijing
On August 25, ant group submitted listing applications to the Shanghai Stock Exchange, Kechuang board and the Hong Kong Stock Exchange respectively, seeking a + H listing, and announced the application documents for the IPO.
According to the prospectus, in the first half of 2020, the operating revenue of ant group was 72.528 billion yuan, while that from 2017 to 2019 was 65.396 billion yuan, 85.722 billion yuan and 120.618 billion yuan respectively;
In terms of net profit, in the first half of 2020, ant group had a net profit of 21.923 billion yuan and a net cash flow of 27.013 billion yuan. The net profit of ant group from 2017 to 2019 is 8.205 billion yuan, 2.156 billion yuan and 18.072 billion yuan respectively.
Through the revenue and net profit data disclosed in the prospectus, we can find that ant group’s “earning power” is very strong. On average, in the first half of this year, ant group made an average of 120 million yuan a day.
So, what exactly does ant group make money on? How did Ma Yun, who retired long ago, master the actual control of ants?
Alipay’s business is no longer the main source of revenue.
First of all, analyze the income source of ant group.
Most people may think that payment business is the main source of revenue for the ant group, because Alipay may be a very popular group of ants in the lives of ordinary people.
It’s true that payments used to be a major source of revenue for companies, but that has changed.
The company’s revenue source is composed of digital payment and business services, digital financial technology platform, innovation business and other three businesses.
From January to June 2020, the revenue of digital payment and business services was 26.011 billion yuan, accounting for 35.86% of the total revenue; the revenue of digital financial technology platform was 45.972 billion yuan, accounting for 63.39% of the total revenue; the revenue of innovative business and other services was 544 million yuan, accounting for 0.75% of the total revenue.
That is to say, nowadays, the revenue of ant technology mainly comes from the digital financial technology platform, accounting for more than 60%, while Alipay’s digital payment and business services are ranked second, which is no longer the main source of income for the ant group.
Compared with previous data, in 2017, Alipay accounted for more than 50% of the total digital revenue and business services. With the development of the company, the proportion of this business decreased year by year, and it is no longer the primary profit source of ant group.
Flower and borrow become money making machines
So what is the main source of ant group’s revenue from “digital financial technology platform” business?
Digital financial technology platform is mainly composed of micro loan technology platform, financial management technology platform and insurance technology platform. As of the first half of 2020, the revenue of micro loan technology platform was 28.586 billion yuan, accounting for 39.41% of the total revenue; the revenue of financial technology platform was 11.283 billion yuan, accounting for 15.56% of the total revenue; the revenue of insurance technology platform was 6.104 billion yuan, accounting for 8.42% of the total revenue.
Generally speaking, the representative business of micro loan technology platform is the well-known Huabei and borrowing business; the representative business of financial technology platform is yu’ebao and yulibao; and the representative business of insurance technology platform is mutual treasure business.
It can be seen that the business income of digital financial technology platform accounts for more than 60% of ant group’s total revenue, among which the micro loan technology platform accounts for the highest proportion, reaching nearly 40%.
Therefore, it is not too much to say that Huabei and jiebei are the main revenue of ant group.
More than 700 million people use ant digital financial services
Ant group said in its prospectus that during the 12 months ending June 30, 2020, 729 million users had used one or more digital financial services on its platform.
At present, the business scale of micro credit technology platform has reached 1732 billion yuan of consumer credit and 421.7 billion yuan of credit for small and micro operators. And financial institutions to partner with about 100 banks. The asset management scale of the financial technology platform has reached 4098.6 billion yuan, and has cooperated with about 170 asset management companies. The premium and apportionment amount in the insurance technology platform reached 51.8 billion yuan, and reached cooperation with 90 insurance institutions.
Micro loan technology platform
During the 12-month period ending June 30, 2020, about 500 million users have obtained consumer credit through the micro loan technology platform. In addition, as of the first half of this year, the average balance of Huabei users was about 2000 yuan, and the daily interest rate of borrowing was about 0.02%.
The main products in the micro loan technology platform are Huabei and jiebei. In the whole process of using Huabei or borrowing baibei, financial institutions will not only be responsible for issuing loans and making credit limit decisions, but also pay ant group a technical service fee.
As of June 30, 2020, ant group has contributed a total of 1732 billion yuan in consumer credit balance, of which 98% of the credit balance is actually issued by financial institution partners.
In addition to consumer credit business, micro loan technology platform business also includes small and micro operators business. The so-called small and micro operators, in fact, including Taobao, Tmall and other e-commerce platform business, as well as the use of Alipay’s offline businesses.
This business aims to provide small and micro businesses with small amount, no guarantee, flexible term, low interest rate and timely loan business. During the 12-month period up to June 30, 2020, the daily interest rate of loans for small and micro operators is about 1 / 10000, and more than 20 million users of small and micro operators have obtained credit.
Similarly, ant group in this service to collect financial institutions and associated companies online banking technical service fees as a source of revenue.
Financial technology platform
As of June 30, 2020, more than 500 million users have invested with the help of the company’s financial technology service platform; about 170 asset management companies have provided more than 6000 financial products, involving public fund management companies, insurance companies, banks and securities companies.

Yu’ebao and Yu Libao are one of the main products of ant group’s financial technology platform. Similar to yu’ebao, Yu Libao is a cash management service product for small and micro operators, which can automatically transfer cash from small and micro operators to money market funds every day to earn income.
Another product belonging to the financial technology platform is “big finance”, which is an online platform to provide financial products. The products include bond, stock and mixed public funds; fixed term products; fixed term deposits and other products.
In the whole financial product system, ant group is mainly responsible for financial product screening, investor management and intelligent investment advisory services as the “booster” role of asset management partners. Asset management partners are responsible for product design, delivery and interaction with ant group platform investors.
Insurance technology platform
Over the 12 months ended June 30, 2020, more than 570 million Alipay users were insured or insured through the company platform, or participated in mutual assistance projects. In addition, ant group has cooperated with about 90 insurance cooperative organizations and launched more than 2000 products. At present, the premium and apportionment amount contributed by the platform has reached 51.8 billion yuan.
Insurance products are mainly life insurance, health insurance, mutual aid projects and property insurance. “Mutual treasure” mutual aid program, which once attracted high attention, has accumulated more than 100 million members. In 2019, the average sharing cost of each member is 29 yuan.
In the process of insurance product service, ant group provides customer acquisition channels, and carries out product design, underwriting and claim settlement with insurance partners, while insurance partners are independently responsible for product delivery and reimbursement.
Payment business remains strong
Although the head of the group has become a digital financial technology in the first half of this year, the digital payment business represented by Alipay is still strong.
As of June 30, 2020, the scale of payment transactions processed by ant group platform has reached 118 trillion yuan; in addition, the total international payment transaction scale has also reached 621.9 billion yuan.
“Service fee” is the main source of income
Whether it is Alipay’s digital payment and business services as a representative business or as a digital financial technology platform for representing business, the income of the ant group mainly comes from all kinds of “service fees”.
First of all, the business of digital financial technology platform mainly provides ant group with revenue in the form of technical service fee.
Specifically, in the micro loan technology platform business, ant group relies on financial institutions and other partners to obtain a certain percentage of the corresponding interest income to charge technical service fees, which is therefore related to the consumption credit and the credit balance of small and micro operators;
In the financial technology platform business, ant group mainly collects technical service fees according to a certain percentage of the company platform to facilitate the financial institutions’ partners to achieve asset management scale;
In the insurance technology platform business, ant group mainly obtains the technical service fee according to a certain percentage of the premium collected by the financial institution partners, or a certain percentage of the apportioned amount paid by the users participating in the photo mutual treasure project.
Secondly, in terms of digital payment and business services, according to the prospectus, the company’s main income comes from domestic commercial transactions, which charge merchants and trading platforms transaction service fees according to a certain percentage of the transaction scale; at the same time, it collects transaction service fees for cross-border commercial transactions to generate income; it also charges fees for financial transactions and personal transactions. In addition, ant group began to earn income from business services, but the specific amount was not disclosed.
Retired Ma Yun is still the actual controller of ant group
How did he do it?
In addition to information about the composition of ant group’s revenue, we can also find out that Ma Yun is the actual controller of ant group from the prospectus.
According to the information provided in the prospectus, the board of directors of ant group includes Alibaba founding partner Cai Chongxin, Alibaba CTO Cheng Li and Alibaba CPO Jiang Fang, as well as three executive directors including Chairman Jing Xiandong, CEO Hu Xiaoming and CTO Ni Xingjun, and three independent non-executive directors Hao Quan, Hu Zuliu and Huang Yiping. Mr Ma is not on the board.
The main shareholders of ant group include Hangzhou Junhan, Hangzhou junao and Alibaba group. The three companies hold 83.17% shares of ant group.
However, Hangzhou YUNPU actually controls Hangzhou Junhan and Hangzhou junao, while Ma Yun holds 34% of Hangzhou YUNPU shares. Then, through the formal control of Hangzhou junao and Hangzhou Junhan, Ma Yun has the ultimate control of ant group.
According to the articles of association and concerted action agreement signed by Ma Yun, Jing Xiandong, Hu Xiaoming and Jiang Fang on August 21, 2020, the shareholders’ meeting is the highest authority of Hangzhou yunplatinum. Hangzhou Junhan and Hangzhou junao exercise their voting rights on the shares of ant group held by them, and Hangzhou Junhan and Hangzhou junao nominate directors to ant group The exercise of the shareholders’ right to propose proposals by supervisors and other shareholders, and the increase or decrease of the shares of ant group held by Hangzhou Junhan and Hangzhou junao shall be deliberated by the shareholders’ meeting of Hangzhou yunplatinum, and shall be approved by more than two-thirds of the voting rights held by the shareholders with voting rights. Therefore, Ma Yun has the right to veto the relevant matters, and when the relevant resolutions are not passed by the shareholders’ meeting of Hangzhou yunplatinum, others shall The shareholders shall vote in accordance with Mr. Ma Yun’s decision, make and sign relevant resolutions of the shareholders’ meeting.
However, the prospectus also made it clear that Ma Yun’s economic interests did not include all the equity interests of Hangzhou Junhan and Hangzhou junao. And Ma Yun’s economic interests only correspond to this share.
Ant group independent of Ali
Although ant group belongs to “Ali Department” company, the prospectus points out that the relationship between Ali and ants is independent of each other, and there is no substantial competition.
In September 2019, Alibaba Hangzhou, a wholly-owned subsidiary of Alibaba group, acquired 33% of the shares of ant group. However, according to the equity and asset purchase agreement, ant group shall not engage in the business or reasonable extension of Alibaba group from time to time, and Alibaba group shall not engage in business activities within the business scope of ant group.

The prospectus points out that ant group is independent of Alibaba Group in five aspects: Asset Integrity, business independence, personnel independence, financial independence and institutional independence. Ant group has independent decision-making ability in these five aspects. In addition, its own business has a clear business division with Alibaba business.
However, ant group is also acknowledging the risk of a conflict of interest between the company and Alibaba group. According to the prospectus, both parties may enter new business areas beyond the existing business scope in the future, thus creating competition in new business areas. On the one hand, if ant group’s business expansion is regarded as Alibaba Group’s business or its reasonable extension, ant will limit its business expansion; on the other hand, if ant technology invests in companies outside the business scope of both parties, ant technology will also need to provide priority investment opportunities to Alibaba group.
After reading the prospectus of ant group, didn’t you think that the flowers and borrowings you used every day contributed so much income to ant group?
(statement: This article only represents the author’s point of view, not Sina’s position.)