Alibaba Calls Off Cainiao’s IPO After Market Stoop Worsens

Alibaba Group Holding Ltd. is asking off an preliminary public providing for its Cainiao logistics arm in Hong Kong, shelving a much-anticipated debut that might have raised greater than $1 billion.

China’s e-commerce pioneer, which owns 64 p.c of Cainiao, mentioned in a Tuesday submitting it now plans to purchase out all remaining inventory held by traders and workers for $3.75 billion. The corporate determined to postpone the transaction due to poor market situations, folks accustomed to the matter mentioned. It misplaced its style for the deal this yr as shares waned, the folks mentioned, asking to stay nameless discussing a non-public matter. Nonetheless, Alibaba may select to revive the IPO ought to markets recuperate, they added.

It’s the second time Alibaba has nixed a high-profile coming-out occasion for considered one of its most important companies. In 2023, the Chinese language web agency surprised the market when it known as off a list of its $11 billion cloud unit. Cainiao Sensible Logistics Community Ltd., which handles a significant chunk of the hundreds of thousands of parcels that Alibaba’s e-commerce enterprise generates every day, was thought of considered one of its fastest-growing enterprises.

Final yr, Alibaba additionally put plans to debut its Freshippo grocery chain on the backburner. Its retreat coincides with rising uncertainty in public markets as Beijing grapples with a property disaster, lack of overseas investor confidence and the resultant financial downturn. On the identical time, domestically oriented companies are struggling to develop their topline due to waning client confidence.

“Given the strategic significance of Cainiao to Alibaba and the numerous long-term alternative we see in constructing out a world logistics community, we imagine that is an acceptable time to double down on Alibaba’s funding in Cainiao,” Alibaba chairman Joseph Tsai mentioned in a blogpost Tuesday.

Alibaba continues to be grappling with basic questions surrounding the once-dominant web firm — a barometer of Chinese language demand. Its efficiency underscored a lack of market share to rivals corresponding to PDD and ByteDance Ltd. It posted a lower-than-projected 5 p.c rise in December quarter income to 260.3 billion yuan ($36.2 billion), nicely off the tempo of earlier years.

Fuelling the uncertainty, the corporate goes by means of a sophisticated multi-way cut up supposed to create a number of impartial companies and rejuvenate the nationwide icon. The corporate final yr outlined plans to drift its Freshippo grocery chain and Cainiao logistics arm. However Tsai final month appeared to melt its stance on these plans, saying Alibaba was in no hurry to drift Cainiao as a result of difficult market situations would stop it from reaping honest worth.

Cainiao, which filed for its IPO about six months in the past in September, was valued at about $10.3 billion within the minority shareholder buyout.

Alibaba — which after years of frenetic funding now controls an unlimited portfolio of belongings — is now actively trying to unload a few of these non-core holdings, he added. It’s exploring methods to dump the InTime division retailer chain and different retail operations, Bloomberg Information has reported.

By Pei Li

Study extra:

Alibaba’s Logistics Arm Recordsdata for $1 Billion-Plus IPO

Cainiao Sensible Logistics Community Ltd., the logistics arm of Alibaba Group Holding Ltd., has filed for its Hong Kong preliminary public providing, doubtlessly making it among the many first of the Chinese language e-commerce chief’s models to go public.