Alibaba Group and its subsidiary recently reduced their holdings in ZTO Express, cashing out approximately $500 million (around 33.54 billion RMB). Data shows that over the past two years, Alibaba has successively reduced holdings by over 20 billion RMB.
ZTO Express announced a “Major Disclosure” on the evening of September 22. The announcement stated that on September 21, Alibaba Group and its subsidiary sold about 25 million shares of ZTO Express Class A common stock (ADS) at a price of $20.02 per ADR (a 4.5% discount to market price) on the NYSE, cashing out approximately $500 million. After the transaction, Alibaba’s stake in ZTO Express dropped to 6.1%.
According to a report in the “Southern Metropolis Daily” on the 25th, following the announcement, ZTO Express’s US stocks fell by 7.15% on the same day, and its Hong Kong stocks fell by over 7% the next trading day.
This divestment is Alibaba’s latest move in disposing of non-core assets. In 2023, Alibaba initiated the “1+6+N” organizational reform, gradually exiting non-core asset areas, further focusing on its main business by splitting its operations. Subsequently, Alibaba successively reduced holdings in Kuaidogache, Xiaopeng Motors, Shangtang Technology, Bilibili, and Enlight Media, sold assets such as InTime Department Store and Highsun Retail, and continuously reduced holdings in YTO Express and Yunda in the courier sector, clearing its position in Best Express. Alibaba’s combined stake in YTO Express has decreased to 14.75%; its stake in Yunda has dropped to 0.71% and is no longer among Yunda’s top ten shareholders.
On September 24, “Direct IPO” under Beijing Lieyun Wanluo Technology Co., Ltd. stated that based on market estimates, Alibaba’s asset disposals have cumulatively cashed out over 20 billion RMB in two years. The funds recovered will flow into the group’s designated priority track.
Since June 2023 when Wu Yongming became the CEO of Alibaba Group Holdings, he has consistently adhered to the two core strategies of “e-commerce and AI + cloud”, stating that Alibaba will invest over 380 billion RMB in building cloud and AI hardware infrastructure in the next three years.
Huatai Securities analysis believes that based on current plans, Alibaba is expected to continue investing in algorithm construction, with investment intensity higher than the previous 380 billion. The essence of the contraction of these non-core businesses is the realization of the shift in Alibaba’s strategic focus. This e-commerce ecosystem giant is accelerating towards AI.