Alibaba Logistics Unit Cainiao Could List in Hong Kong in Q1

Cainiao was said to seek raising at least US$1.0 billion through one of the hottest Asian IPOs planned in 2024.

BEIJING, January 16 (TMTPost)— Alibaba Group’s unit Cainiao Smart Logistics Network Limited seems closer to a blockbuster listing this year.

Credit:Visual China

Credit:Visual China

Cainiao is steadily proceeding its listing plan and is expected to raise US$1.0 billion through an initial public offering (IPO), which could complete as soon as the first quarter of 2024, Expressboo, a Chinese website focusing on express delivery industry chain, learned from multiple sources recently.

While Cainiao didn’t confirm the news, it has been under the course to be the first Alibaba’s unit that goes public after the Chinese internet giant went through its biggest ever organization overhaul.

Alibaba announced in March 2023 that it decided to split into six business groups, including Taobao Tmall Group, Alibaba International Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Network Limited, Cloud Intelligence Group, Digital Media and Entertainment Group. Five of these major business groups have the flexibility to raise external capital and potentially to seek its own IPO, with the exception of Taobao & Tmall Group, which remains wholly-owned by Alibaba Group. Each business group is fully responsible for its performance, with financial independence.

Alibaba said in May that its board of directors approved a full spin-off of the Cloud Intelligence Group and listing plans about two other businesses. Freshippo (Heman), a grocery stores operator under the China commerce segment, is approved to execute an IPO, and expected to be completed in the next 6 to 12 months. Cainiao is approved to explore an IPO with the target to complete the deal in the next 12 to 18 months.

A filling in September showed Alibaba has submitted a spinoff plan to the Hong Kong Stock Exchange (HKEX)and there is no assurance that the spinoff will take place. Cainiao is a group provides supply chain, logistics and delivery services that Alibaba holds a 69.54% stakes in. If the spinoff proposal approved and completed, Cainiao will remain Alibaba’s subsidiary as the group will continue to hold more than 50% of stakes.

Cainiao is the world’s No. 1 cross-border e-commerce logistics company in terms of parcel volume in 2022, with one of the world’s largest logistics networks in terms of geographic reach, according to CIC. In fiscal year 2023 ended March 31, Cainiao’s total cross-border parcel volume exceeded 1.5 billion, and it served over 100,000 merchants and brands, according to a prospectus released in September. Cainiao has gradually increased revenue in the past three years, with a total revenue of RMB197,4 billion from the fiscal year 2021 to 2023.The revenue rose 26.8% year-over-year (YoY) to RMB66.87 billion in the fiscal year 2022, and increased 16.% YoY to RMB77.8 billion in the year 2023. In the first fiscal quarter of 2024, Cainiao turned around and recorded net income of RMB288 million, compared with net loss of RMB370 million a year earlier.

Cainiao was reported in September to be likely to raise at lease US$1 billion through its first share sale. A Bloomberg report last week ranked the Alibaba arm as one of the hottest Asian IPOs planned in 2024. The report noted other IPOs of a similar size estimated in Hong Kong including those of Mixue Group, China’s largest freshly-made drinks maker, and China Resources Beverage, a soft drink unit of a state-owned conglomerate China Resources Holdings Co., Ltd.

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