According to documents disclosed by the Hong Kong Stock Exchange tonight, Alibaba has reduced its holdings of 1.2172 million shares of Kuai Gou Taxi from 5.07% to 4.88%, with an average reduction price between HKD 0.352 and HKD 0.385 per share.
On June 24, 2022, Kuai Gou Taxi was launched. At the time of listing, Alibaba indirectly held shares in Kuaishou Taxi through three companies: Taobao China, Cainiao, and Alibaba Hong Kong Entrepreneurs Fund, L.P. These three companies hold 12.26%, 2.69%, and 0.02% respectively, with a shareholding ratio of 14.97%. Alibaba, with Taobao China and Cainiao as the main players, has followed up on the financing of Series A, Series B, and Series C of Kuaishou Taxi. The consideration for Alibaba's Series A investment is 122 million US dollars, with a subscription of 75.47666 million shares; Series B subscription of 16.568047 million shares for a consideration of 30 million US dollars; Series C subscribed for 106400 shares for a consideration of $23569900, with a total investment of approximately HKD 1 billion. The average stock price cost is approximately $1.65 per share, and the investment cost is nearly HKD 13 per share.
The IPO price of Kuaishou is HKD 21.5, and the latest closing price is only HKD 0.36, which is less than a fraction of the listing price. The latest market value is only HKD 226 million.
Less than a month after its listing, the stock price of Kuai Gou fell below HKD 10 per share. Three months later, according to the Hong Kong Stock Exchange, Alibaba began to reduce its holdings of Kuai Gou, with a cumulative reduction of 6.0324 million shares within three months of listing, and its shareholding ratio dropped to 13.99%. According to the interval average price calculation, the reduction amount is nearly HKD 50 million. Three months later, Alibaba once again reduced its holdings by 902600 shares and cashed out approximately HKD 4.5702 million, further reducing its shareholding ratio. The reduction has been ongoing, but the price is getting lower and lower, with the average price dropping from over HKD 6 per share to less than HKD 0.4 now. Alibaba is likely to incur significant losses.
Not only did Alibaba reduce its holdings, but institutional and individual shareholders such as former chairman Chen Xiaohua, 58 Daojia, and 58 Same City founder and CEO Yao Jinbo are also reducing their holdings.
The main issue is the poor performance of Kuaishou's taxi business. From 2018 to 2022, Kuai Gou Taxi suffered losses of 1.071 billion yuan, 184 million yuan, 658 million yuan, 873 million yuan, and 1.209 billion yuan respectively, with a cumulative loss of nearly 4 billion yuan over the past five years. According to the 2023 semi annual report, a loss of 640 million yuan was recorded during the first half of 2023.
From 2018 to 2022, the sales and marketing expenses of Kuai Gou Taxi were 524 million yuan, 296 million yuan, 195 million yuan, 335 million yuan, and 321 million yuan, respectively, accounting for 115.7%, 54.0%, 36.7%, 50.7%, and 41.5% of the total revenue.
According to the prospectus submitted by Huo Lala last year, the market share of Kuai Gou Taxi has dropped to 2.3%, ranking sixth in the industry.
In 2020, the market share of Fast Dog was still 5.5%, ranking second in the industry.
The market advantage of Huo La La La has been established, and Kuai Gou is continuously marginalized.
The management has also begun to fluctuate. Last December, Kuai Gou Taxi announced that founder Chen Xiaohua had resigned from his position as chairman and executive director due to personal affairs, and had resigned from the nomination committee. In addition, Secretary Yu Yongshi and independent non-executive director Ni Zhengdong also resigned.