① Why is the market so concerned about Alibaba's sale of Intime Retail for 7.4 billion yuan? ② Since the fourth quarter, Alibaba's enterprises have frequently engaged in capital operations; which listed companies might be affected?
On December 17, Alibaba announced that the company, along with another minority shareholder, agreed to sell 100% of Intime's equity to a purchasing consortium composed of members from Youngor Group and Intime's management team, with Alibaba's total proceeds from the sale of Intime amounting to approximately 7.4 billion yuan.
It is worth mentioning that for more than a year now, the divestment of non-core business-related investments has become an important part of Alibaba's strategy.
In September 2023, after establishing the two strategic focuses of 'user first and AI-driven', Alibaba indicated that it would reorganize its business around these two key focuses, reshaping its business strategic priorities.
As of now, Alibaba has successively reduced its holdings in Xiaopeng Motors (09868.HK), Kuaigou Dache (02246.HK), completely divested from Bilibili (09626.HK), SenseTime (00020.HK), Baozun (09991.HK), and other Hong Kong listed companies.
This sale is another asset divestment action under Alibaba's strategy of focusing on its core main business.
As early as the beginning of February this year, rumors circulated in the market that Alibaba was considering selling Intime Retail. During the earnings call in February, management also responded, stating, 'We still have some traditional physical retail businesses on our balance sheet, which are not our core focus. If we can complete an exit, that would be completely reasonable.'
At the meeting, Group CEO Wu Yongming also stated that under the strategic focus, the top priority of the group is to reignite growth momentum in its two core businesses: e-commerce and cloud computing. Prior to this, Wu Yongming also proposed that for non-core businesses, value should be realized through quick profitability or other forms of capitalization to return value to shareholders.
On the other hand, in September 2024, the China Securities Regulatory Commission issued the "Opinions on Deepening the Reform of the Market for Mergers and Acquisitions of Listed Companies", further stimulating the vitality of China's mergers and acquisitions market from the perspectives of supporting cross-industry mergers, simplifying the transaction process in the restructuring market, and increasing regulatory inclusiveness.
Perhaps driven by policy, after entering the fourth quarter, capital operations related to equity assets by Alibaba affiliated companies have shown obvious signs of acceleration.
On October 16, after being suspended for nearly 20 days, SUNART RETAIL (06808.HK), the parent company of RT-Mart, announced that discussions were ongoing between shareholders such as Taobao China and interested offerors regarding the main terms of a possible offer to make any irrevocable commitments.
Earnings Reports show that as of now, Alibaba Group holds 7.508 billion shares of SUNART RETAIL through its controlled companies, with an equity yield of 78.7%.
On December 16, SUNART RETAIL announced that it had not received any definite intentions from interested offerors regarding a possible offer, nor had it received any notice that interested offerors had decided not to proceed with a possible offer.
Nevertheless, judging from the sale of Intime Department Store, it may just be a matter of time before Alibaba further sells off its offline traditional retail business.
In addition, on November 27, A-share listed company Shanghai Lily&Beauty Cosmetics (605136.SH) disclosed a notification from shareholders holding more than 5%, Hangzhou Haoyue Enterprise Management Co., Ltd., stating that it intends to transfer no more than 70.3767 million shares of the company, which does not exceed 17.57% of the total share capital.
On December 13, Hangzhou Dbappsecurity Co., Ltd. (688023.SH) also announced that stockholder Alibaba Venture Capital intends to participate in the pre-IPO shareholder inquiry transfer due to its own funding needs, with the number of shares to be transferred being 2.0454 million, accounting for 2% of the total share capital.
According to the information, Hangzhou Haoyue, as a subsidiary of Alibaba, has historically received over 30 billion yuan in equity investments from Alibaba-related parties such as Alibaba Network and Alibaba Venture Capital.
Additionally, according to Tianyancha's equity penetration information, Hangzhou Haoyue currently holds shares in several A-share listed companies, including Suning.com, China TransInfo Technology, Easyhome New Retail Group Corporation, Meinian Onehealth Healthcare Holdings, and Focus Media Information Technology.
Alibaba's latest quarterly consolidated earnings report shows that as of September 30, 2024, the group still has over 140 billion yuan in equity investments on its books, of which shares in listed companies amount to as much as 67.629 billion yuan.
Overall, in the new M&A cycle led by policy, this clearance sale of Yintai equity is likely the beginning of Alibaba's new round of "downsizing."