HONG KONG • Ant Group could list its shares by the end of this year though the Chinese fintech giant faces a 60 per cent slash in valuation, according to a report from Sanford C. Bernstein & Co.

The firm controlled by billionaire Jack Ma could be worth about US$120 billion (S$160 billion) upon listing due to slower revenue growth, Bernstein analysts led by Mr Kevin Kwek wrote in yesterday's report. Ant may also have to inject 30 billion yuan (S$6.3 billion) to 40 billion yuan of capital into its new consumer finance unit to support credit growth, they said.

The revised estimate is a far cry from valuations that ran as high as US$320 billion before the firm was forced to scrap its initial public offering (IPO) in November last year. China's crackdown forced Ant to withdraw the US$35 billion IPO days before its planned listing in Hong Kong and Shanghai. Bloomberg Intelligence has lowered its valuation to a range of US$29 billion to US$115 billion.

Despite that, Ant is making progress overhauling its business and becoming compliant with regulatory requirements, Bernstein said. It received approval to start its consumer finance unit, paving the way for the planned IPO.

The unit could see its take rate - revenue as percentage of average loan balance - rise by 0.5 percentage point to 3.5 per cent by 2025, as the firm issues more credit using its own capital and generates more interest income, Mr Kwek wrote.

The consumer finance unit will need to provide 30 per cent of funding for all co-loans, based on rules released this year. At 10 times leverage of its registered capital, that means its total amount of joint loans will be capped at 266 billion yuan.

Ant's money market fund Yu'ebao may also have to scale down, shrinking 25 per cent to 1.5 trillion yuan by 2025, curbing revenue growth, Mr Kwek said.

BLOOMBERG