After being heavily fined, ANT GROUP initiates a buyback! Valuation has dropped by 40% compared to 2018.

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On the morning of July 8th, it was disclosed that in order to continuously attract talents by supplementing the employee incentive pool and further meet the shareholders' liquidity needs, a portion of the existing shares will be repurchased with its own funds, with a repurchase ratio not exceeding 7.6% of the total share capital. The relevant matters have been approved by the ANT GROUP board of directors and submitted to the shareholders' meeting for deliberation.

On the evening of July 7th, the financial regulatory department announced that it has successfully promoted the rectification of platform enterprise financial business and shifted the focus of work to normalized supervision. ANT GROUP and its subsidiaries were fined (including confiscation of illegal gains) 7.123 billion yuan and required ANT GROUP to shut down the "Xianghubao" business conducted in violation of regulations. ANT GROUP has completed the rectification and entered a new stage of development.

ANT GROUP stated that this repurchase follows market-oriented principles. In order to determine the repurchase price reasonably, ANT GROUP referred to market practices and hired well-known domestic and foreign investment banks as financial advisors, and priced it based on their valuation reports.

According to the repurchase plan, the repurchase price of ANT GROUP corresponds to a company valuation of approximately 567.1 billion yuan, a decrease of about 40% compared to the Series C financing valuation in 2018 (approximately 960 billion yuan). In the current situation where the valuations of domestic internet companies are relatively low, this change is in line with market expectations.

The shares repurchased by ANT GROUP this time will be transferred to the employee stock incentive pool. Like many internet companies, ANT GROUP launched an employee shareholding plan in the early stages of its entrepreneurship. ANT GROUP stated that using repurchased shares to supplement the employee incentive pool will help attract outstanding talents and enhance the company's ability to serve finance and the real economy with technology. In the past two years, ANT GROUP has continued to increase its research and development investment, seizing new opportunities in the era of intelligence. Its research and development investment will reach 20.4 billion yuan in 2022.

Another consideration for the repurchase is to meet the liquidity needs of shareholders. According to public information, ANT GROUP has continuously provided feasible liquidity solutions to shareholders in an appropriate manner, and has implemented two dividends by the end of 2022. With this repurchase, all shareholders can voluntarily choose whether to participate within the repurchase ratio.

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