Alibaba Group has initiated its restructuring by planning to list its logistics arm, Cainiao, in Hong Kong. This move would mark the first separation of a unit since Alibaba announced its restructuring six months ago. While Alibaba submitted an application to spin off Cainiao Smart Logistics Network to the Hong Kong stock exchange, specific financial details such as the size of the offering have not been finalized. Alibaba will still hold over 50% of shares in Cainiao after the spin-off, and it will remain a subsidiary of the company.
Cainiao, co-founded by Alibaba in 2013, has grown to become a major logistics provider in China, serving both third-party customers and Alibaba itself. The logistics unit aims to raise between $1 billion and $2 billion in its IPO. Cainiao’s listing is expected to be followed by market debuts from other Alibaba units, potentially boosting fundraising activities in Hong Kong. The logistics arm has appointed Citigroup, Citic Securities, and JPMorgan as joint sponsors for its IPO.
Alibaba’s restructuring, announced in late March, involves adopting a holding company management model and splitting its business into six units, most of which will explore capital increases or market debuts to fund growth. This restructuring coincided with Beijing’s efforts to stimulate growth in the private sector. The recent weak IPO market in Hong Kong has been attributed to higher global interest rates and new regulations imposed by Chinese authorities on companies seeking listings on overseas exchanges.
