Cainiao, the logistics arm of Alibaba, reportedly seeks Hong Kong listing in 2023

Cainiao, the logistics arm of Chinese e-commerce giant Alibaba, is reportedly preparing for an initial public offering (IPO) in Hong Kong.

According to Bloomberg, the company is working with banks, including China International Capital Corp. and Citigroup Inc., to prepare for the first-time share sale.

The IPO could happen as soon as the end of 2023, according to insiders. The people, who asked not to be named, added that Cainiao is currently valued at over $20 billion.

This news comes one day after Alibaba CEO Daniel Zhang announced that the company would be split into six separate business groups, each of which may pursue an IPO in the future.

The six groups include Cloud Intelligence, Taobao Tmall Commerce, Local Services, Cainiao Smart Logistics, Global Digital Commerce, and Digital Media & Entertainment.

Cainiao is one of Alibaba’s most important revenue generators. Its revenue rose 27% year-on-year to 16.55 billion yuan ($2.4 billion) in the quarter ended December 31, 2022, 72% of which came from external customers. For reference, Alibaba’s total revenue was 247.8 billion yuan ($36 billion), up 2% year-on-year.

The business attributed the growth to its continued focus on expanding and strengthening its global smart logistics network, covering international express, warehousing and supply chain, last-mile logistics, and other core capabilities.

According to Cainiao, for the quarter ended December 31, 2022, it commenced the operation of five new international sorting centers, bringing the number of overseas sorting centers in operation to fifteen.

Chinese companies’ IPO plans in Hong Kong are showing signs of revival following a turbulent 2022. In addition to Alibaba’s affiliate Cainiao, two subsidiaries of JD.com, Jingdong Property and Jingdong Industrials, also submitted listing applications to the Hong Kong Stock Exchange on Thursday.