According to individuals familiar with the situation, Alibaba logistics arm intends to raise up to $2 billion through an HK offering early in the next year, raising expectations for a rebound in the Asian financial hub’s capital markets.
Following Alibaba’s announcement in late March that it would divide its business into six entities, the majority of which would consider capital raising or market debuts to finance future expansion, Cainiao Network Technology announced its intention to go public.
Three sources have confirmed that Cainiao, which has started to prepare for an IPO, plans to raise between $1 billion and $2 billion in Hong Kong. Since the last conversation is confidential, they declined to give their names.
According to two of the individuals, the anticipated IPO, whose magnitude was not previously mentioned, will probably debut in the early part of 2024.
According to the sources, the plans have not been finalized and may be modified.
Cainiao declared it wouldn’t comment on speculative market activity.
An inquiry for comment was not answered by Alibaba.
In recent years, Alibaba, which serves as a sizable online platform for consumers and sellers, has purchased interests in top express delivery companies to guarantee dependable services for the group.
In 2013, the business established Cainiao with the help of partners that included logistics firms, the owner of a chain of department stores called Intime Group, and Fosun Group. Four years later, Alibaba took over Cainiao and increased its ownership interest from 47% to 67%.
In the nine months that ended in December, Cainiao recorded revenue of 42 billion yuan ($6.07 billion), an increase of 22% over the same period last year. Cainiao supplies software and shares data with warehouses, carriers, and logistics firms. 6% of Alibaba’s overall revenue is derived from this.
The logistics unit’s planned initial public offering (IPO) is the first capital raise for Alibaba’s anticipated spin-off subsidiaries that have been made publically known as it embarks on the largest restructuring in its 24-year history.
According to analysts, the division may make it easier for local regulators to exert control over Chinese billionaire Jack Ma’s expansive corporate empire, which is being targeted as part of a larger campaign against the private sector that will begin in late 2020.
At the end of March, Alibaba launched a historic business restructuring in which it will divide its USD 220 billion company into six businesses with independent decision-making about funding and share sales. Every new business unit, according to the corporation, would be free to raise funds and offer shares to the general public.
Market participants claim that Cainiao has the most developed circumstances for an IPO out of the six business groupings, which also comprise cloud intelligence, Taobao Tmall Commerce, local services, global digital commerce, and digital media and entertainment.
