Alibaba’s Logistics Unit Cainiao Files For Hong Kong IPO

Alibaba Group's logistics arm Cainiao is expected to go public and get listed in Hong Kong according to media reports. The plan is part of the company's restructuring exercise which kicked off on Tuesday (September 26). The logistics arm of Alibaba Group Holding Ltd has filed an initial prospectus for an initial public offering (IPO) in Hong Kong. With this, the Cainiao IPO would be among the first of Alibaba's units to go public since the Chinese e-commerce company announced its break-up six months ago.

Alibaba Group Holding Ltd. said on Tuesday that it will spin off Cainiao Smart Logistics Network Ltd., the logistics unit of its e-commerce empire, through an IPO in Hong Kong. Alibaba will continue to be a majority shareholder in Cainiao, holding more than 50% of the company and retaining it as a subsidiary.

According to a Bloomberg News report, the first-time share sale could raise at least $1 billion, and banks including Citic Securities Co., Citigroup Inc. and JPMorgan Chase & Co. have been working on the deal.

Cainiao was co-founded by Alibaba (BABA) in 2013 as a provider of logistics services for traders on the company's e-commerce platforms.

For the third quarter ended June Cainiao's revenue rose 34% on year to 23.16 billion yuan.

According to the IPO prospectus, the company intends to utilize the proceeds from the public issue for business expansion and acquisitions.

Earlier this month, Eddie Yongming Wu succeeded Daniel Zhang as chief executive officer in the e-commerce giant's biggest executive reshuffle since its restructuring.

Dealmakers believe that Cainiao's IPO can likely be followed by market debuts of other Alibaba units including logistics and cloud computing in the near term to raise external cap