Analysts tip Cainiao to be first Alibaba unit to IPO given its supporting role in e-commerce giant’s overseas growth
- Cainiao has become the hot favourite to conduct an IPO first, with analysts saying it plays ‘critical role’ in supporting Alibaba’s overseas growth
- Despite the gloomy global economic situation and supply chain risks last year, Cainiao has been expanding its international logistics network
Alibaba Group Holding’s logistics arm Cainiao, one of six units to be split off from the e-commerce giant as part of its restructuring plan, is seen as the most likely candidate for an initial public offering (IPO) due to its “unique advantages and growth potential”, analysts say.
Cainiao Network, which is estimated to be worth over US$20 billion, is holding discussions with banks for an IPO in Hong Kong as early as the end of this year, according to a Bloomberg report citing people familiar with the matter.
Cainiao declined to comment.
Alibaba announced a major restructuring plan to split its US$257 billion empire into six independent entities last Tuesday, saying it would lead to quicker decision-making and give each unit greater operational independence.
Each company will be allowed to “pursue fundraising from third parties and IPOs when they are ready,” said Daniel Zhang Yong, chairman and chief executive of Alibaba, which also owns the South China Morning Post.
The other five units to be devolved are Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Global Digital Commerce Group and the Digital Media and Entertainment Group.