This article is from WeChat public account:Prism (ID: lengjing_qqfinance), author: Wen Shijun, cover from: Oriental IC
The most proud “children” of the HKEx are returning home. This is the third IPO in the 20 years since Alibaba was established, and the second IPO in Hong Kong.
On November 26, Alibaba Group Holdings Limited (AGHL, Alibaba Group Holding Limited) will be officially listed on the Hong Kong Stock Exchange, stocks Code [9988.HK]. Alibaba plans to issue 500 million new shares at HK$176 per share and raise funds of HK$88 billion. If the 75 million shares are oversubscribed, the maximum fundraising will be approximately HK$101.2 billion.
Alibaba’s shareholding structure will become 25.2% of Softbank’s shareholding, and directors and senior executives will hold 8.8% (Ma Yun 6%, Cai Chongxin 1.9%) , Altaba (formerly Yahoo) fell below the 5% disclosure line.
Although the IPO fundraising amount is somewhat smaller than the previous estimate of 20 billion US dollars, the second listing of Alibaba in Hong Kong will undoubtedly bring a huge warm current to the Hong Kong stock market.
As Zhang Yong said in his “Open Letter from the Chairman and CEO of the Board of Directors”: “We still believe in the bright future of Hong Kong.”
Why should Alibaba be listed in Hong Kong twice? Behind this is a systematic decision.
ADS was released in the US due to the stock split at the end of July.The shares issued in Hong Kong are exchanged in a ratio of 1:8. This interchangeability between US stocks and Hong Kong stocks has, to a certain extent, built Alibaba’s buffer and double insurance mechanism in the global capital market.
The deeper reason is that Alibaba has long been immersed in market rules after 20 years of capital baptism. At this stage, it not only needs financing, but also the best time for financing. It happens that a Hong Kong capital market that understands itself more “hugs” itself.
Why don’t you do it?
A brief description of the VIE structure published by Alibaba’s 2019 Hong Kong IPO prospectus (Source: Prospectus)
First, the NYSE can’t fit Ali
Some institutional investors ridiculed, “Alibaba’s attempt is so big, only one NYSE can be loaded?”
1. Roofing on sunny days
For a giant who has decided to live for 102 years, Alibaba knows that capital is mixed with red and black. But this veteran player has long had a “sexual format” value judgment on capital – first taking capital, and other problems with capital.
Zhang Yong said a meaningful sentence, “Renovation of the roof on a sunny day, planning in good times.”
Undoubtedly, Alibaba is now sunny, with a market value of 48.63 billion U.S. dollars and 37.58 times PE, making it an Internet industry in China and the world.
After the double eleven, Alibaba is in the limelight.
The report of the release of star map data shows that as of November 11, 2019, 24Point, double eleven network sales reached 410.1 billion yuan, an increase of 30%. Compared with 20%, the growth rate of 24% increased by 6 percentage points in 2018.
Among them, Alibaba’s double eleven sales reached 268.4 billion yuan, accounting for 65% of the total network sales, although down from last year’s 68%, but still far ahead of other platforms.
Alibaba has long been more than just an e-commerce giant, and it is already a phenomenal platform economy.
As of June 30, Alibaba has approximately 710 subsidiaries and consolidated entities established in China, and approximately 530 subsidiaries established in other countries and regions. It divides these businesses into four categories: core business, cloud computing, digital media and entertainment, and innovative business.
This is the perfect time for Alibaba to once again awaken the company’s value through the Hong Kong stock IPO.
2. Another pivot point for IPO
Alibaba belongs to this era, just like the 21st century belongs to the Internet industry.
Microsoft’s Bill Gates and Amazon’s Jeff Bezos take turns to be the richest man in the world. In particular, Amazon’s layout in cloud technology, e-commerce, logistics and other fields is very consistent with Alibaba.
In the US domestic market, Amazon has become a “monopoly” in the US President Trump’s mouth through low-cost “grab competition” in the fields of e-commerce and logistics.
Alibaba’s closest moment to Amazon is in 2014.
In that year, Alibaba was listed on the NYSE, and the number of active buyers accounted for a quarter of China’s population, carrying more than 8% of China’s total retail sales of consumer goods. That year, WeChat payment just launched a year, grabbing red envelopes has not become a New Year’s custom, Alipay is synonymous with online payment.
In the global roadshow before the listing of the NYSE, Alibaba’s planning for the future is the three cores: cloud computing and big data, rural markets, globalization and cross-border trade. The e-commerce empire seems to have stabilized, horizontally expanding to the countryside and the world, opening up the underlying technology and applications, and the road to the “Amazon” seems to be flat and broad.
In 2015, a lot of (selling good goods) was established by the social wind business.
There are no corporate entities formed, only one website that has been running for a few months.
Cai Chongxin is the Executive Vice Chairman of the Board of Directors of Alibaba. He was working in Hong Kong for a Swedish investment company, Investor AB, founded in 1916.
This is the first intimate contact between Alibaba and the global capital market, and soon accepted the rules of the capital market.
After Ma Yun and Cai Chongxin met, only more than a month later, June 28, 1999, Alibaba Group Holdings Limited (AGHL, Alibaba Group Holding Limited, the main body of the company listed in Hong Kong this time) was incorporated in the Cayman Islands.
June 19, 1999 Ma Yun and Cai Chongxin canoeing West Lake (Source: forbes.com)
On September 9, 1999, Alibaba China was incorporated in a wholly foreign-owned form. In October 1999, Alibaba received a first round of venture capital of $5 million.
Based on current standards, Alibaba introduced a star based investor team from the beginning.
The $5 million investment was led by Goldman Sachs, which was $3.3 million. The investment institutions included Huaying Fund, Fidelity Asia, Huiya Capital and Cai Chongxin’s old owner, Investor AB, in exchange for 50% of Alibaba. Equity.
With the cornerstone investor endorsement, coupled with the global boom in Internet capital at the end of the century (later known as the interconnected bubble) Ali’s follow-up financing is again an order of magnitude.
In October 1999, Ma Yun visited Sun Zhengyi; January 2000The world’s largest Internet stock IPO since its listing.
Alibaba has no scenery. The media commented that it is the most proud “child” of the Hong Kong Stock Exchange.
This trend did not last long. The US subprime mortgage crisis broke out and the global stock market fell collectively. The Hang Seng Index once fell to a record low. Alibaba [1688.HK] shares went down.
After that, although there has been a rebound, the stock price trend is far behind the growth rate of Alibaba. Especially in the following years, Ali 2C e-commerce began to explode.
In April 2008, Taobao launched Taobao Mall, the later Tmall. In September 2009, Alibaba acquired Wanwang and Alibaba Cloud was established. In April 2010, “International Edition Taobao” AliExpress was launched. In August, the mobile Taobao client was launched. In June 2011, Taobao Mall was independent from Taobao.
On February 21, 2012, Alibaba [1688.HK] proposed a privatization offer with a repurchase price of HK$13.5 per share (with 2007 issue) The price is exactly the same), which is estimated to cost HK$19 billion.
For the reason of delisting, Ma Yun’s explanation is to help the company transform and the future listing of Alibaba Group: “The privatization of Alibaba will save us from the pressures we need to have a listed company. Long-term planning that is most beneficial to customers. Privatization offers can also provide our shareholders with an attractive cash-out opportunity without having to wait indefinitely for the company to complete the transition.”
The reality is much more complicated.
After and after the withdrawal of Hong Kong stocks, Alibaba has contacted a number of financial institutions and hopes to obtain cash by selling shares and loans. However, Ma Yun also stressed: “The premise is that the ownership structure of Ali is not controlled by one or two major shareholders.” /p>
This is one of the important considerations behind the withdrawal of Hong Kong stocks: going to Yahoo.
What makes Alibaba and Ma Yun feel uneasy is the investment agreement signed by the two parties in 2005. At that time, the two parties agreed that by October 2010, Yahoo will receive the same voting rights as the equity, that is, 40% of Alibaba’s voting rights. In this way, Ma Yun and other management will lose to Yahoo, there is a danger of “out of the game”.
Alibaba has repeatedly tried to buy back shares from Yahoo, but then Yahoo CEO Carol Bartz(Carol Bartz) is not willing to let go of this potential stock.
Reinventing management control, coupled with the need for Alibaba’s overall listing, has prompted Ma Yun and other management to resolve to buy back Alibaba’s public shares.
These are the background of the 2012 delisting of Alibaba Hong Kong.
Three, Alibaba is “capital”
For 20 years, Alibaba grew up from capital students to become the godfather of capital, and the Hong Kong Stock Exchange has “embrace” Alibaba.
1. “Partners” who cannot compromise”
More importantly, I convinced Yahoo to sell Ali shares, all of which turned around at the end of 2011.
In September 2011, Carol Bartz (Carol Bartz) was Yahoo Chairman Roy Bostock #span Class=”text-remarks” label=”Remarks”>(Roy Bostock) phone notification of dismissal.
In the same period, Alibaba launched the “Dawn Plan” to include the Yunfeng Fund with a valuation of $35 billion (named after Ma Yun and Yan Feng) ), Russian venture capital firms DST, Silver Lake and other fund companies sold some of the management and employee stocks, in exchange for 2 billion US dollars.
The “Dawn Plan” and the later “Long March Plan” were designed to prevent Yahoo from taking control. Regardless of whether the method is to raise funds to repurchase Yahoo’s equity, Alibaba [1688.HK] privatization (also requires funds), or other means.
In 2012, Alibaba began to contact China Investment Corporation, China Development Bank and other institutions for financing on the premise of “not being controlled by one or two major shareholders”.