Ma cashes out US$870m as Alibaba puts 2 IPOs on ice

Themis Qi

Billionaire Jack Ma Yun will offload a total of 10 million US shares in Alibaba (9988) for US$870 million (HK$6.8 billion) next week, a filing showed, while the tech giant he founded has decided to halt two spin-offs amid uncertainties.

Alibaba's shares in New York slumped 6.8 percent in pre-market trading on the stake cut.

Meanwhile, the Chinese tech giant decided to end the full spin-off of its cloud unit amid the expanded US chip ban and to suspend the initial public offering of its grocery arm Freshippo amid the disappointing market valuations.

As two subsidiaries halt in seeking listing, Alibaba's historic six-way reorganization plan announced in March has turned into a tough fight, with only its logistic unit Cainiao staying in the pipeline.

The decisions came with its second-quarter results for the period ending in September.

The revenue grew 9 percent to 224.8 billion yuan (HK$242 billion), slightly above market estimates of 224.32 billion yuan, as China's retail sales recovered gradually.

The net profit advanced 19 percent yearly to 40.2 billion yuan. The adjusted net profit swung to 27.7 billion yuan from an adjusted net loss of 20.56 billion yuan one year ago.

The operating margin also improved by 3 percentage points yearly to 15 percent in the second quarter of the financial year ending in March 2024.

Taobao and Tmall Group, operating the dominant e-commerce platforms in mainland China, remains a major contributor and posted a 4 percent rise to 97.65 billion yuan in revenue.

Alibaba International Digital Commerce Group boosted income with a 53 percent surge year-on-year to 24.5 billion yuan.

The revenue of the local services group increased by 16 percent to 15.56 billion yuan, and Cainiao reported a 25 percent jump to 22.8 billion yuan.

Digital Media and Entertainment Group grew 11 percent yearly to 5.78 billion yuan, thanks to the significant rebound of box offices and concerts in mainland China during the July-September period.

The cloud unit, quitting the listing pipeline, saw its revenue inch up 2 percent only to 27.65 billion yuan.

In the results, Alibaba said the expanded chip ban by the United States may "materially and adversely" affect the cloud unit and limit its ability to upgrade its technological capabilities.