is unlikely to suffer from possible US restrictions on the company due to the fact that its presence overseas is so limited. Reuters on October 12th thatAnt’s Alipay and Tencent’s WeChat payment platforms are primarily used by Chinese citizens who conduct transactions in renminbi.
In fact, Morningstar senior equity analyst, Chelsey Tam told Reuters that “basically the overseas revenue accounts for maybe 5% or less for Ant Group,” which means that “the U.S. revenue contribution would be even less than that.”
The tiny percentage of US-related revenue has to do with United States-based merchants accepting payments from Chinese travelers and businesses in the country.
Tam also said that even if Ant’s platforms does branch out, the US is the most unlikely target: “it’s quite easy for investors to understand that if Alipay and Wechat Pay go overseas the U.S. is probably not the top priority.”
US Pushes Back on China-Based Tech Giants
Indeed, the Trump administration is currently considering curbs on the Alibaba and Tencent affiliate over concerns that its payment platforms may threaten national security.
While the restrictions have not been implemented yet, their looming presence is an indication of how far the Trump administration is willing to go to prevent Chinese tech giants from embedding themselves in the United States financial system.
LightStream Research analyst, Supun Walpola, who publishes on the Smartkarma platform, explained to Reuters that “the ban is more about stopping Ant from expanding in the U.S. in the future, but that shouldn’t have an immediate impact on the valuation as there is lot more growth left for Ant in China.”
Still, the growing divide between the tech world in the East and West seems to be an increasingly serious issue: Forbes author Jon Markman earlier this month that that “politicians in Washington and Beijing are splitting the internet in half, and that is bad news for innovation and technology investors.”
While most of the United States’ vitriol has been directed toward Huawei, Ant could become the next target as it continues to grow.
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