Source: Bloomberg
Author: jane zhang, zheping huang, Henry Ren
Alibaba Group Holdings Co., Ltd.'s "organizational change" may provide a model for the reconstruction of China's high -tech industry: on the one hand, it meets the goal of the Chinese government to dismantle technology giants, and on the other hand, it has releasedThe value of shareholders with a long time.
The Chinese e -commerce giant announced on Tuesday that it plans to divide its business with a scale of $ 200 billion into 6 major business groups. Each group can independently make financing and first public offering (IPO).This is the largest structure reorganization in Alibaba's history, so as to achieve the two major goals that make many peers, not only to appease the government's suspicion of science and technology giants, but also appease investors who have been destroyed by the annual supervision and rectification.
The stocks of Alibaba's stock in New York soared by more than 14%, and the market value increased by about 32 billion US dollars.Tencent Holdings has also risen, and the market expects that other companies may also follow similar actions.In the Hong Kong market on Wednesday, Alibaba once soared by 15%.
China's large technology companies have adopted a holding company's management model.Alibaba traditionally tends to put most of its businesses in one, from the supermarket to the data center, all operate under the banner of Alibaba.This reorganization means giving up this model.The Chinese government has always criticized the influence of the network platform and is worried that the market and data will be in the hands of a few technology companies, which will curb innovation and fair competition.Over the years, Alibaba and Tencent have invested in hundreds of start -ups. From consumer interconnection to car service and grocery distribution, they often become leaders in various fields and have a huge impact.
"For Beijing, it solves concerns about the abuse of monopoly power of Internet giants," Wang and Gin Wang wrote by Evercore ISI analysts."This spin -off may also become a template for Alibaba's peers, but we do not expect similar actions soon."
I don't know if it is a coincidence. Ma Yun, the founder of Alibaba's billionaire, has returned to China in the near future after more than a year.This opportunity prompted people to speculate that the government finally let go of the hands and feet of this well -known company, which can increase its efforts to release productivity in other areas of the private sector and contribute to the economic recovery after the epidemic.
This also sends a strong signal, indicating that Alibaba has prepared to face investors and open markets.In the past few years, the Chinese government has governed and rectified the Internet industry, and Alibaba's market value has evaporated more than $ 500 billion.The reorganization will give its e -commerce, media, cloud services and other major business departments far greater than the autonomy of the past, laying a foundation for future spin -off and public listing.
Evercore analysts wrote that Beijing did not break any business line of Alibaba, which means that Alibaba's son -in -law still maintains market share in their respective fields, including the monopoly position in the field of online retail.
Shareholders value
Baseders and investors praised Alibaba's moves.The company's spin -off usually creates value for shareholders, because the company will focus on the most profitable business from the parent company, or the departments that shake the losses to improve the company's situation.Bernstein's Robin Robin and other analysts said that the sum of the value of Alibaba's business departments may far exceed the company as a whole.They estimate that according to the results of departmental analysis, Alibaba's stock price may be as high as $ 164, and the closing price before the announcement is only $ 86.12.
"Alibaba told the market that it was inadequate," said Jonathan Pines, the chief investment portistor manager of Federated Hermes, said."The reason for the rise in stock prices is because it is indeed valuable and because the company sends a signal, hoping that its value will be recognized -this is a line with the shareholders."
Alibaba has a successful precedent in divestitution.In 2010, Alipay was stripped, which was unpopular at the time, but eventually cast a fintech giant Ant Group.
Edmond de Rothschild Asset Managemen Fund Manager Xiadong Bao said that the policies will continue to blow, Ma Yun's return to the country and Alibaba structure restructuring will make the market recognize that China focuses on economic growth.
