Alibaba to launch Hong Kong IPO for its logistics arm Cainiao

In a significant move, Alibaba Group has initiated its restructuring process by announcing plans to list its logistics subsidiary, Cainiao, on the Hong Kong Stock Exchange. This decision marks the first step in Alibaba’s restructuring journey since the e-commerce giant revealed its breakup strategy six months ago.

Alibaba officially submitted an application to spin off Cainiao Smart Logistics Network, although specific financial details, such as the size of the offering, have yet to be finalized. Notably, Alibaba, which currently holds a 69.54 percent stake in Cainiao, will retain over 50 percent of shares in the subsidiary, making it a continued part of the Alibaba family after the spin-off.

Cainiao, co-founded by Alibaba in 2013 with partners including Fosun Group and various logistics firms, has grown into a major logistics provider within China, serving both third-party customers and Alibaba itself. In its prospectus, Cainiao disclosed that Alibaba contributed around 30 percent of its total revenue during the financial reporting years from 2021 to 2023.

The upcoming IPO of Cainiao is expected to revitalize fundraising activities in Hong Kong, potentially setting the stage for additional Alibaba unit debuts. However, Cainiao must file with the China Securities Regulatory Commission within three working days of its Hong Kong IPO filing and receive regulatory approval before proceeding with the offering.

Citigroup, Citic Securities, and JPMorgan have been appointed as joint sponsors for Cainiao’s IPO, and the subsidiary has raised a total of 31 billion yuan (USD 4.24 billion) through three funding rounds since its formation in 2015. This strategic move aligns with Alibaba’s broader restructuring plan, which aims to divide its business into six units, many of which will explore capital increases and market debuts to drive growth.

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