(Beijing) The Chinese internet giant Alibaba announced on Tuesday the largest restructuring in its history, by dividing the group into six entities, five of which can be listed separately, a welcome news on the stock exchange.
The group is a heavyweight in China’s technology sector, with businesses in e-commerce, logistics, cloud computing, media, entertainment and artificial intelligence.
“ The market is the best test, and each entity will be able to proceed with independent fundraising and an IPO when it is ready to do so ”, group boss Daniel Zhang said in a letter to his employees. .
Taobao, a very popular online sales platform in China, will continue to be 100% owned by the Alibaba Group.
This restructuring will “create value for shareholders and stimulate market competitiveness”, assured in an Alibaba press release.
This is the “most significant reshuffle in terms of governance in 24 years” of the group’s existence, which thus aims for a more “agile” organization, assured the company based in Hangzhou (east).
The six new entities will each have a CEO and a board of directors.
Daniel Zhang will remain the CEO of the whole, but also of the unit dedicated to cloud computing.
Alibaba’s listing in New York and Hong Kong will not be affected by the restructuring, the group said.
In pre-opening trading on the New York Stock Exchange, investors cheered the announcement on Tuesday, sending the stock up more than 9%.
Like other Chinese internet giants, Alibaba has been penalized in recent years by the Chinese government’s takeover of the technology sector.
The authorities had in particular derailed in 2020 a gigantic IPO in Hong Kong of its payment subsidiary Ant Group, while Alibaba was subsequently fined 2.3 billion euros for abuse of position dominant.
Beijing seems to have loosened up since then and in early January the Chinese authorities finally gave the green light to Ant for a fundraising of more than one billion euros in Hong Kong.
In 2022, total revenue for Chinese internet companies fell just over 1% to 1.46 trillion yuan (CAD 294 billion), the first contraction in nearly a decade, according to ministry data. Chinese Industry and Information Technology.
On February 23, Alibaba reported a quarterly revenue increase of only 2% year-on-year to 34 billion euros (one euro = C$1.48), a marked slowdown compared to the growth that it was showing before.
The group had cited in particular “ lower demand and disruptions in the supply chain and logistics related to the impact ” of the end of the policy of strict measures against COVID-19 in China.
In the previous quarter, Alibaba announced 2.7 billion euros in losses.
The announcement of its restructuring comes as Alibaba founder, billionaire Jack Ma, made a rare public appearance in China on Monday, after several months abroad.
Jack Ma, who left the management of his group in 2019 to devote himself entirely to philanthropic activities, has been keeping a low profile for two and a half years after public criticism of the Chinese regulator.
Since his media withdrawal in 2020, every piece of information concerning the billionaire and his travels has been widely commented on in China on social networks.
