After Alibaba stopped the spin-off of its cloud business and the IPO of Hema was suspended, Alibaba's capital operation was reborn, and Cainiao announced that it had withdrawn its IPO in Hong Kong.
On March 26, Alibaba announced that its logistics subsidiary, Cainiao Smart Logistics Network Co., Ltd. ("Cainiao"), had withdrawn its initial public offering and listing application on the Hong Kong Stock Exchange.
At the same time, Alibaba plans to issue an offer to Cainiao's minority shareholders (including employees) to sell all of its issued Cainiao shares to Alibaba Group at a price of US$0.62 per share, for a total consideration of up to US$3.75 billion (approximately RMB27.069 billion).
According to the Securities Times, market analysts said Alibaba initially announced a comprehensive asset restructuring plan in May 2023, which included a Cainiao's IPO. At that time, Alibaba believed that a separate listing would better reflect the value of Cainiao as an important business for Alibaba. However, the situation has changed, and comprehensive consideration finds that the IPO cannot highlight the intrinsic value of Cainiao as a leading global e-commerce logistics company.
Ali Cainiao withdrew its IPO application
On March 26, Alibaba Group announced that it decided to withdraw Cainiao's listing application in order to better strengthen the synergy with Alibaba's e-commerce business and continue to support Cainiao's investment in expanding its global logistics network.
Alibaba believes that Cainiao is an integral part of Alibaba's core business and an important infrastructure for the development of e-commerce. These changes will help Cainiao focus on its business and execute its further expansion plans. Alibaba will increase strategic investment in the logistics sector to support the expansion of Cainiao's global logistics network.
In May 2023, Alibaba announced a comprehensive asset restructuring plan, including an IPO for Cainiao.
At that time, Alibaba believed that a separate listing would better reflect the value of Cainiao as an important business of Alibaba.
Now the situation has changed. Alibaba said that after comprehensive consideration, the current IPO cannot highlight the intrinsic value of Cainiao as a global e-commerce logistics leader. "Given the strategic importance of Cainiao to Alibaba, and the significant long-term opportunities we see in building our global logistics network, we believe it is an opportune time for Alibaba to increase its investment in Cainiao," said Joe Tsai, Chairman of Alibaba Group. ”
According to Yicai news on February 7 this year, Tsai Chongxin, chairman of Alibaba Group, said on a conference call that Alibaba is not in a hurry to let rookies and Hema carry out IPOs. "We're going to think about separate financing for different businesses, but we're not going to rush it. Tsai said that the focus of the strategy is now to promote synergies between the different businesses within the group.
At the time of withdrawing the application for the IPO of Cainiao's Hong Kong stocks, Alibaba threw out another offer plan.
Alibaba Group, which owns approximately 63.7% of Cainiao's fully diluted shares, including vested interests under Cainiao's employee stock ownership plan, will provide up to US$3.75 billion in cash for the tender offer to acquire all of Cainiao's minority shareholders and employees' attributable shares.
The Cainiao Employee Share Purchase Plan will be executed in August 2024, and employees will be able to voluntarily sell all Cainiao shares vested on or before August 1, 2024.
Following the completion of the above-mentioned offer, Alibaba plans to adjust some of Cainiao's businesses to better achieve strategic synergies with Taotian Group and Alibaba International Digital Business Group, and support Cainiao's long-term strategic expansion of its global network.
"This strategic adjustment to the rookie is consistent with Alibaba's strategic priorities. Alibaba said that the above-mentioned acquisition strength shows Alibaba's confidence in being optimistic about rookies and its determination to continue to invest.
It is reported that the Cainiao employee equity acquisition plan will be implemented in August 2024, and employees can voluntarily sell all Cainiao shares that have vested on or before August 1, 2024.
According to the Shanghai Securities News, it is reported that the latest strategic adjustment to the rookie is consistent with Alibaba's strategic priorities. The acquisition is also a reward for the long-term contributions of employees and helps to further boost the team's confidence.
In addition to boosting the confidence of the team and employees internally, Alibaba has also continued to increase buybacks recently, and Alibaba founders Jack Ma and Joe Tsai have also recently increased their holdings of Alibaba shares. In February, Alibaba announced that it would increase the size of its share buyback program by $25 billion to $65 billion, and that the buyback period would be extended until the end of March 2027.
It was hoped for
"The first stock of global smart logistics"
Looking back on the listing process of Cainiao, on September 26 last year, Cainiao officially submitted a listing application to the Hong Kong Stock Exchange, becoming the first business group to officially enter the IPO process after Alibaba's "1+6+N".
According to the previously released prospectus, Cainiao was established in 2013 and its main business includes international logistics, domestic logistics and technology and other services.
Cainiao's disruptive solution has shortened the general logistics time between China and major countries around the world from 30 to 60 days to 10 days or less.
In China, Cainiao is a leading e-commerce logistics service provider, and more than half of the world's top 50 FMCG brands have long-term cooperation with Cainiao. At the same time, Cainiao is also the largest reverse logistics service provider in China, and operates the world's largest Cainiao post station network, handling more than 80 million parcels per day.
In terms of financial capacity, Cainiao's total revenue in fiscal 2023 will be 77.8 billion yuan, with a compound growth rate of 21% in the past three years. Cainiao's profitability also continued to strengthen, with adjusted EBITDA exceeding $2.8 billion in fiscal 2023. In Alibaba's latest quarterly earnings report announced on February 7, Cainiao's quarterly revenue increased by 24% year-on-year, maintaining strong growth.
According to the data, Cainiao is currently one of the world's largest cross-border e-commerce logistics companies, handling more than 1.5 billion cross-border e-commerce parcels annually. In the latest quarter, Cainiao's "Global 5-Day Delivery" international express delivery capacity covered two new countries to 10 countries, and orders achieved triple-digit quarter-on-quarter growth. While enhancing its end-to-end cross-border logistics capabilities, Cainiao is also accelerating the construction of overseas local self-built logistics. During the quarter, Cainiao upgraded its logistics solutions in key countries and markets such as North America and Latin America. For example, in North America, Cainiao Container Shipping officially entered the U.S. market, which can achieve the fastest 5-day delivery by air and 15-day delivery by sea, and support one-click consolidation of parcels across the network.
Industry insiders have pointed out that Cainiao's cross-border e-commerce logistics business has become the world's first, and if the spin-off is successful in the future, it is expected to become the world's first smart logistics stock.
In fact, last year, the capital market had high hopes for a rookie IPO.
In January this year, foreign media reported that "Cainiao's listing will be one of the hottest IPO plans in Asia in 2024." After a difficult 2023, Asian IPOs are likely to get a boost as the Hong Kong market expects a gradual return to large Chinese deals this year. ”
Editor|Cheng Peng, Du Bo
Proofreading|Sun Zhicheng
Cover image source: Visual China (data map)
The daily economic news is synthesized from the company's announcements, Securities Times, Shanghai Securities News, etc
National Business Daily