Alibaba Logistics aims for a $255 million IPO.

The group expects to raise $255 million in IPO capital through a stock listing in Hong Kong in early 2024.

Cainiao Network Technology's plan to launch an initial public offering (IPO) comes after Alibaba announced in late March 2023 that it would split into six units. These subsidiaries will pursue fundraising or market launches, focusing on future development. Cainiao, which had already begun its IPO process, is currently in the process of raising between $128 million and $255 million.

Alibaba currently operates as a massive online marketplace for buyers and sellers. In addition, the group is acquiring stakes in leading express delivery companies, ensuring high-quality delivery services for its e-commerce operations.

This group also co-founded Cainiao in 2013. Other partners include department store owner Intime Group, Fosun Group, and several other logistics companies. Alibaba took control of Cainiao four years ago, increasing its ownership stake from 47% to 67%.

Cainiao is a company specializing in providing software and data sharing services to warehouses, carriers, and other logistics businesses. Previously, the company reported revenue of 42 billion yuan (approximately $6.07 billion) in the nine months ending December 2022; a 22% increase year-on-year, accounting for 6% of Alibaba's total revenue.

A corner of Cainiao's warehouse in Jiangsu, China, on October 26, 2020. Photo: Aly Song — A corner of Cainiao's warehouse in Jiangsu, China, on October 26, 2020. Photo: *Aly Song*

The logistics arm's IPO plan is the first in a series of planned fundraising rounds for subsidiaries spun off from Alibaba. This information was publicly reported as the company undertakes the largest restructuring in its 24-year history.

Experts believe the split could reduce scrutiny of the Alibaba Group. This has been a goal of local regulators since late 2020, aiming to diminish the influence of certain private businesses. The remaining five units include Cloud Intelligence, Taobao Tmall Commerce, Local Services, Global Digital Commerce, and Digital Media and Entertainment.

Cainiao's potential IPO is highly anticipated by many parties and entities. It is expected to pave the way for the market entry of several other Alibaba subsidiaries in the near future. This could also help revive stalled fundraising efforts in Hong Kong.

Although Alibaba has not yet disclosed potential listing locations for other entities, bankers are predicting that Hong Kong will be a potential destination due to its proximity to the group's "home" market.

According to Refinitiv data, approximately $1.5 billion has been raised through IPOs in Hong Kong this year, up from $1.2 billion in the same period last year. Craig Coben, former head of capital markets business for Asia-Pacific at Bank of America, said Alibaba's subsidiaries have the potential to attract the attention of major global investors.

Cẩn Y (According to Reuters )

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