SYDNEY/HONG KONG, May 8 (Reuters) – The logistics arm of Alibaba (9988.HK) is expected to aim to revitalize markets in the Asian financial hub by up to 2 billion early next year.
Cainiao Network Technology’s initial public offering (IPO) plan comes after Alibaba announced in late March that it would split its business into six entities, and that most of them would explore capital raisings or go-to-market to fund future growth.
Cainiao, which has started work on the IPO, plans to raise between $1 billion and $2 billion, according to three Hong Kong sources. They declined to be identified as listing deliberations are private.
The planned IPO, the size of which has not yet been reported, is expected to launch in early 2024, two of the sources said.
The sources warned that the plans are still ongoing and are subject to change.
Cainiao said it would not comment on market speculation.
Alibaba did not respond to a request for comment.
Alibaba, which operates as a giant online marketplace for buyers and sellers, has acquired stakes in leading express delivery companies in recent years to ensure reliable services for the group.
Cainiao was founded in 2013 alongside partners including department store owner Intime Group, conglomerate Fosun Group and a handful of logistics companies. Alibaba took control of Cainiao four years later and has increased its stake from 47% to 67%.
Cainiao, which provides software and exchanges data with warehouses, carriers and logistics companies, reported revenue of 42 billion yuan ($6.07 billion) in the nine months ended December, up 22% year-on-year and 6th % of Alibaba’s total sales.
The logistics arm’s IPO plan is the first of expected publicly reported capital raises for Alibaba’s spin-off entities as it undertakes the largest restructuring in its 24-year history.
Analysts have said the split could facilitate scrutiny of Chinese billionaire Jack Ma’s sprawling business empire, which has been a target of local regulators since late 2020 as part of a broader crackdown on private companies.
The other five units include Cloud Intelligence, Taobao Tmall Commerce, Local Services, Global Digital Commerce, and Digital Media and Entertainment.
($1 = 6.9149 Chinese renminbi yuan)
Reporting by Scott Murdoch in Sydney and Julie Zhu in Hong Kong; Edited by Sumeet Chatterjee and Jamie Freed
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Scott Murdoch
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