On March 22nd, market news announced that Alibaba will sell the Bilibili ADR (up and down ratio indicator), with an expected price of $11.60 per ADR and a potential realization of $357.8 million. Regarding this, an Alibaba insider stated, "The sale is mainly based on Alibaba's own capital management goals and will not affect the cooperation between the two parties in business. Alibaba's related businesses will continue to strengthen cooperation with Bilibili in various fields."
This is an action taken by Alibaba to optimize its asset allocation and return rate, and continuously focus on its core business. Since Alibaba Chairman Cai Chongxin and CEO Wu Yongming took office in September last year, they have stated on multiple occasions that they will maintain long-term focus and high-intensity investment in core businesses. For non core businesses, they will realize the value of these assets through quick profitability or various other capitalization methods.
Previously, when Dai Shan stepped down as CEO of Taotian Group, her next action was to assist the group in establishing an Alibaba Group asset management company and forming a professional management team. At that time, Cai Chongxin stated in an employee letter that "in order to optimize the return on capital and enhance shareholder value, the Group's Capital Management Committee authorized the establishment of an asset management company.".
In the past period of time, Alibaba has frequently taken actions in asset sales. Just one day before the sale of Bilibili ADR, market news showed that Alibaba subsidiary Taobao China Holdings Limited planned to sell 33 million units of Xiaopeng Motors ADS (American Depositary Shares) for a total value of approximately $314 million, with a sale date of March 20th. Earlier, Alibaba also reduced its holdings in Hong Kong stock company Kuai Gou Taxi through its subsidiaries.
During Alibaba's Q3 fiscal year 2024 conference call, Chairman Cai Chongxin also mentioned that Alibaba's sale of non core assets is progressing smoothly. As of the first nine months of the fiscal year ending in December last year, the group has completed the withdrawal of $1.7 billion in non core assets and is actively studying how to withdraw some listed companies.
In the process of establishing the new order of Alibaba, Alibaba is firmly practicing the path of focusing on its core business, which refers to e-commerce and cloud computing businesses. Reducing holdings in investment companies has become an option, while exiting non core businesses is also an option. Previously, Cai Chongxin stated that "there are still some traditional physical retail businesses on Alibaba's balance sheet, which are not core focused businesses. Alibaba's exit is also a reasonable approach, but it may take time.".
Alibaba will continue to pursue a path of slimming down, but now, Alibaba's move to reduce its holdings in investment companies is far ahead of exiting non core businesses.