- Cainiao Smart Logistics Network Ltd., Alibaba Group's logistics arm, has submitted its application for an initial public offering (IPO) in Hong Kong. The IPO is expected to raise at least $1 billion, though specific terms were not disclosed in the preliminary prospectus. Citic Securities Co., Citigroup Inc., and JPMorgan Chase & Co. are the joint sponsors of the offering. The Hong Kong Stock Exchange has given the green light for the proposed Cainiao spinoff and IPO.
- Alibaba intends to maintain more than 50% of Cainiao's shares, keeping it as a subsidiary. This move positions Cainiao as a potential frontrunner among Alibaba's units seeking separate listings following the company's announcement to split into six main units. Meanwhile, Alibaba has delayed the Hong Kong IPO of its Freshippo grocery chain due to weak sentiment for consumer stocks in China. The company is prioritizing the listings of its other units.
Why it matters
Cainiao, founded in 2013, serves as the delivery backbone for Alibaba's Chinese online marketplaces and has expanded into the global e-commerce sphere, facilitating deliveries for millions of merchants and brands. Over the years, Cainiao has experienced significant growth, with revenue from Alibaba accounting for 30% of its sales over the past three fiscal years.