Take stock of Ali’s four major assets to be listed.
Editor’s note: This article is from WeChat public account “ Tencent Deep Web ” (ID: qqshenwang), author Sun Hongchao.
On the morning of November 26, Alibaba Group Holding Co., Ltd. was officially listed on the Hong Kong Stock Exchange, with an issue price of HK $ 176, a fundraising of HK $ 88 billion, and a stock code [9988.HK]. Alibaba’s opening price on the first day of listing was HK $ 187, a sharp increase of 6.3% from the HK $ 176 offer price.
According to the data, the underwriters of the funds raised by Alibaba in this issue include DBS Asia Capital (DBS), UBS, JP Morgan, Morgan Stanley, ICBC International Securities, CICC, Deutsche Bank, CITIC CLSA, CMB International Capital Corporation, Shanghai Investment Bank Morgan Fund and many other well-known international financial institutions, nearly 200,000 investors participated.
In contrast, Alibaba’s U.S. stocks closed at US $ 190.45 on November 25, up 1.96%, with a total market value of US $ 509.139 billion.
After the secondary listing in Hong Kong, Alibaba’s shareholding structure is: Softbank holds 25.2%, directors and senior executives hold 8.8% (Ma Yun 6%, Cai Chongxin 1.9%), and former major shareholder Altaba (formerly Yahoo) dropped below the 5% disclosure line.
This is the second time Alibaba has entered the Hong Kong stock market: In 2007, the Alibaba Group listed its B2B business in Hong Kong, raising a total of HK $ 11.6 billion, which was the largest financing scale of a Chinese Internet company at that time; in 2012, Alibaba announced the privatization and completed the delisting of the Hong Kong Stock Exchange. In 2013, Alibaba went to Hong Kong again to seek the overall listing of the group, but at that time, the Hong Kong Supervisory Office failed to resolve the issue of different rights in the same shares. Raised 25 billion US dollars, becoming the world’s largest IPO.
In 2018, the Hong Kong Stock Exchange announced a new “Listing Rules” to allow companies with “same rights but different rights” to list. After the new rules were enacted, a wave of mainland technology companies went public in Hong Kong, and even a feat of eight hammers and four gongs a day. At the same time, China-listed companies listed in the United States are facing potential macro-policy regulatory risks. Technology companies such as Alibaba are considering returning to the domestic capital market.
Against landing in Hong Kong stocks, Alibaba’s core goal is not just cash. In recent years, Alibaba has successively acquired / invested in a number of companies (acquisition of Netease Koala, investment in Midian Health, increase in rookie etc.), but the latest earnings It shows that Alibaba has 234.1 billion yuan in book cash, and each quarter has a net inflow of hundreds of billions of operating cash flows.
The more important question is, Current US review of Alibaba is continuing to strengthenThe US Trade Representative Office previously reported that Alibaba was once again included in the notorious market list for selling counterfeit goods , and there was even a motion suggesting that Chinese companies listed in the US may be directly regulated by US law. At the end of September, Bloomberg even “disclosed” that the Trump administration is considering limiting US capital inflows to China, including measures to delist Chinese companies from the US stock exchange (the news has been denied by the US Treasury).
The return of Hong Kong stocks will smooth the way for other domestic Internet companies and even Alibaba’s multiple businesses. The highly anticipated CDR has gradually become cold. Hong Kong stocks + US stocks may become another good choice. Alibaba made centralized acquisitions before going public in the United States, but these acquisitions are considered to be an effective means of high market value. At this time, Alibaba is still an e-commerce company with a light asset and a simple business model. However, a few years later, Alibaba has established a sound business closed loop through emerging businesses such as ants, rookie, cloud computing, and nailing and more acquisition investments.
Alibaba’s initial entry into the capital market was the B2B business, and the core goal of Hong Kong stocks being delisted and relisted was to incorporate the emerging Taobao (C2C format) into the listing system. The four major business segments listed by Alibaba are now the core Business, cloud computing, digital media and entertainment, and innovative businesses. In addition to the four major business segments, Alibaba still has a lot of business waiting for spin-off listing. The successful listing of the two places at the same time will become an effective role model for these subsidiaries / investment companies.
Ant Financial Services
Estimated time to market: 2020
Current valuation: $ 37.3 billion
The closest to the listing target is Ant Financial, one of Alibaba’s two money bags (the other is Ali’s mother).
It is reported that Ant Financial will be listed on the overseas and domestic science and technology board at the same time next year (2020). The official response of Ant Financial is that there is no timetable for listing. At the end of 2017, Ma Yun responded to the ant listing plan at a press conference site: “The ant is not ready.” However, some insiders of Ant Financial Services told “Shenwang” that the listing and listing have entered the schedule, “2020 (Year) should be a number you can expect. “
In May 2003, Alibaba set up Taobao, but at this time, it was more offline trading, which really helped Taobao becomeThe e-commerce platform is Alipay, a “guaranteed transaction.” In 2011, Alipay spun off from Alibaba and became an independent company. In 2014, it established its parent company, Ant Financial. Earlier, Alipay provided Ali with Escrow guarantee and payment services, and Alibaba paid them handling fees, and the rate was determined by the bank’s processing costs and operating costs. Alibaba provides intellectual property and software technology services to Alipay, and Ant Financial Services pays 37.5% of pre-tax profits.
Beyond the Alibaba system, Ant Financial’s business lines are becoming wider and wider, from Alipay and Yu’e Bao to Ant Antenna, Freight Insurance, Sesame Credit … Ant Financial includes almost all financial services.
On September 23 this year, Alibaba announced that it had received 33% of the new shares issued by Ant Financial in accordance with the equity and asset purchase agreement prepared by the two parties in 2014. The agreement requires Ant Financial to pay Alibaba 37.5% of its pre-tax profits each year in exchange for Alibaba’s intellectual property and software technology services. In addition, when certain conditions are met, Alibaba has the right to invest in and hold 33% of Ant Financial, and Ant Financial’s profit share with Alibaba will also terminate at the same time.
According to the prospectus submitted by Alibaba to the Hong Kong Stock Exchange, in September 2019, when the delivery conditions were met, Alibaba calculated using the equity method according to the agreement and obtained 33% of Ant Financial’s shares for RMB 87.5 billion. It also confirmed that RMB69.2 billion (US $ 9.7 billion) of revenue was included in interest income and net investment income.
According to this figure, the value of Ant Financial is RMB 262.5 billion (US $ 37.3 billion). Although this number is far from its peak value (over US $ 100 billion), it is a part of the Alibaba ecosystem. The most important part is that Ant Financial still has imagination that cannot be ignored. More importantly, in the field of blockchain and overseas markets, Ant Financial has become the pioneer of Alibaba, which will help Ant Financial to further increase its valuation in the future. Ant Financial’s overseas layout mainly focuses on two major directions. One is Alipay, which attracts Chinese outbound tourists and overseas Chinese to use Alipay to shop in Europe and Asia; the other is investment banking, insurance, and payment institutions.
Some analysts pointed out that the termination of the profit sharing between Ant Financial and Alibaba can better match the equity share of Ant Financial shareholders with their attributable profits and lay the foundation for Ant Financial’s future listing. At the same time, Alibaba’s direct stake in Ant Financial will help overseas investors better understand the relationship between the two companies.
Cainiao Network
Time to market: no plan
Current valuation: over $ 20 billion
Besides Ant Financial, Cainiao is considered to be the closest Alibaba sub-business to be listed. However, it is reported that before the listing, Cainiao Network still tried to complete at least one or even two rounds of financing and reinvested / acquired a domestic express-related company before it will specifically advance the listing.
On May 28, 2013, Ali, SF, Santong and Yida (Shentong, Yuantong, Zhongtong, Yunda) and others jointly established “Cainiao Network Technology Co., Ltd.”. In the company’s equity structure, Tmall invested 2.15 billion, accounting for 43% of the shares; Yuantong, SF, Shentong, Yunda, and Zhongtong each invested 50 million, accounting for 1% of the shares.
It is worth noting that on the same day, Ma Yun publicly stated that Alibaba had excluded the listing of US stocks and focused on Hong Kong stocks. Six years later, Alibaba has indeed gone public in Hong Kong, but it is a secondary listing after the US stock market.
Before Double Eleven this year, Alibaba once again led and completed a new round of capital increase for Cainiao Network. In this round of transactions, Ali invested RMB 23.3 billion (about 3.3 billion U.S. dollars) through capital increase and purchase of old shares. Its shareholding in Cainiao also increased from approximately 51% to approximately 63%. Shareholders also participated in a new round of financing.
In September 2017, Alibaba increased the capital of Cainiao by 5.3 billion yuan and increased its shareholding in Cainiao from 47% to 51%. It also announced that it will continue to invest 100 billion yuan in the next five years. According to the agreement, this time Alibaba will invest 5.3 billion yuan in Cainiao Network. After the capital increase is completed, Alibaba will increase its stake in Cainiao from 47% to 51%, achieving absolute control and adding a new director seat to occupy Four of the seven seats on the rookie board.
After the capital increase, Alibaba is a continuous injection of express delivery companies: Best Logistics, Yuantong Express, Zhongtong Express, Shentong Express and other express giants have joined the Alibaba camp.
Alibaba’s second quarter fiscal 2020 financial report shows that Cainiao Network’s single-quarter revenue was 4.759 billion yuan, an increase of 48% year-on-year, and it is estimated that the annual revenue will be around 20 billion yuan. As early as in 2017, the valuation of Cainiao had exceeded RMB 100 billion. Some insiders close to Cainiao have revealed that the valuation of Cainiao in this round of financing has been greatly improved (over RMB 200 billion).
Ali Sports
Time to market: No <