Date
23 September 2017
In its filing, Alibaba says it intends to raise US$1 billion in the share offering. Photo: Bloomberg
In its filing, Alibaba says it intends to raise US$1 billion in the share offering. Photo: Bloomberg

Alibaba includes Cainiao among listing assets in US IPO

Cainiao Internet Technology Ltd., which plans to develop China’s largest national courier service website, is among the assets that Alibaba Group has listed for its initial public offering (IPO) in the United States.

The move surprised many market observers since Cainiao chief executive Jonathan Lu said last year his company would not be included in Alibaba’s IPO.

According to a prospectus submitted to the US Securities and Exchange Commission on Wednesday, Alibaba intends to raise US$1 billion in the share sale, a figure that will be used to calculate its registration fee. But market observers said the company is expected to raise up to US$20 billion, which would make it the biggest IPO in the US since Facebook’s US$16 billion offering in May 2012.

Its listing assets include its business-to-business (B2B) services, e-commerce platforms Taobao and Tmall, mobile operation systems, and the smart logistics network Cainiao, among other firms.

Alibaba formed Cainiao last year as a joint venture with eight leading e-retailers and courier services. The partners plan invest as much as 300 billion yuan (US$48.11 billion) in the company with the intention of making it the dominant player in China’s courier service industry.

In January this year, Alibaba’s rival, Tencent Holdings Ltd. (00700.HK), invested HK$1.5 billion (US$193.5 million) in logistics and retail center developer China South City Holdings (01668.HK), while Tom Group Ltd. (002383.HK), controlled by Hong Kong billionaire Li Ka-shing, announced the establishment of a joint venture with China Post Group to develop e-commerce business in China. Tom Group contributed 155 million yuan by taking up a convertible loan issued by the joint venture.

In the filing, Alibaba disclosed it invested another 1.3 billion yuan in Cainiao early this year, raising its stake in the joint venture to 48 percent.

But amid souring investor sentiment for technology stocks, Alibaba needs to take measures to add to its value if it expects a valuation of about US$200 billion, Apple Daily reported Thursday, citing remarks by Kenny Tang, general manager of the securities business division of AMTD Financial Planning Ltd.

Alibaba said it reserves the right to ask Alipay, its online payment subsidiary, to go public within a decade.

Many details of the offering, such as listing venue, pricing range and the number of shares to be sold, have not been set in the filing.

– Contact HKEJ at [email protected]

MY/JP/CG

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