Alibaba's fintech and China's biggest mobile payments company, the Ant Group, has started its preparatory filing with China's securities regulator to dual list in Shanghai and Hong Kong.

There are rumors that Ant Group is hoping to sell 10% of its shares on Shanghai's Nasdaq-like STAR board and 5% on the Hong Kong Stock Exchange, according to report in Reuters. Alibaba currently owns 33% of Ant, while Alibaba's co-founder and former executive chairman, Jack Ma, owns 8.8%, but with over 50% of voting power.

According to Reuters, Ant is seeking a valuation of over $200B in the initial public offering (IPO). Jason Helfstein, an Oppenheimer analyst, currently values ANT at 210 B. Helfstein's buy rating on BABA has a price target of $290. With shares in Alibaba up 20% year-to-date, this price target suggests there could be a 14% upside potential.

Ant Group's dual-listing IPO plan should also unlock value for BABA. According to National Bureau of Statistics (NBS), e-commerce penetration reached 29% in June, on COVID-19 tailwinds, up 6% y/y, vs. +2%/ +4% in 2019/2018.

"We believe the penetration increase is sustainable, as new buyers appreciate convenience and existing buyers expand purchasing categories," Helfstein told investors recently.

Overall, BABA stock shows a strong buy analyst consensus, with 19 recent buy ratings vs 1 hold rating. The average analyst price target stands at $280, with a 10% upside potential.