Alibaba, the Chinese e-commerce giant, has reportedly planned to divide its business into six different units, and its logistics division, Cainiao Network Technology, is likely to be the first one to hold an initial public offering (IPO). This IPO is expected to be listed on the Hong Kong exchange and is anticipated to occur in 2023. The logistics unit, which has a valuation of around $20 billion, is a vital part of Alibaba’s business ecosystem, responsible for facilitating deliveries and managing the supply chain of its online marketplaces.
The move to spin off the logistics unit is part of Alibaba’s plan to unlock value in its various business units and provide more transparency to investors. Alibaba has hired CICC and Citigroup to work on the spinout, and the IPO is expected to generate significant investor interest. Bloomberg reports that the IPO could take place by the end of the year, though there has yet to be an official announcement regarding the timeline.
The IPO of Alibaba is expected to generate significant investor interest
Alibaba’s decision to divide its business into six different units is part of its efforts to comply with Chinese regulations on internet companies’ antitrust issues. The company has been under increased regulatory scrutiny, and the Chinese government has imposed various penalties and fines on Alibaba and other tech giants, including Tencent and Didi. Alibaba’s CEO, Daniel Zhang, has emphasized the importance of complying with regulations, and the company has been taking measures to streamline its business operations and restructure its various business units.
According to Bloomberg, Alibaba’s logistics division, Cainiao Network Technology, is reportedly considering a Hong Kong IPO in 2023 as part of Alibaba’s plan to divide its business into six different units. The size and terms of the IPO have yet to be determined, but Cainiao’s current valuation is estimated to be around $20 billion. This IPO is expected to generate significant investor interest and could be one of the most significant listings in Hong Kong.
Hong Kong IPO has been attracting many Chinese tech giants
The move of spliting the business in six unites is part of the company’s efforts to comply with Chinese regulations and unlock value in its various business units.In related news, JD.com, another Chinese e-commerce giant, saw its stock prices surge on Thursday after it filed for Hong Kong IPOs for two of its divisions. The JD Health International IPO is expected to raise $4 billion, while the JD Logistics IPO could raise $3 billion. The two divisions, JD Health International and JD Logistics are expected to go public later this year.
The move by JD.com to spin off its divisions and pursue IPOs is also seen as part of the company’s strategy to unlock value in its various business units and expand its business operations. The Hong Kong IPO market has been active in recent years, attracting many Chinese tech giants, and it is expected to remain a popular choice for companies looking to go public.