File photo/NBD

On the evening of May 18th, Alibaba Group announced that if everything goes smoothly, Alibaba Cloud will be fully separated from Alibaba Group and independently listed within the next 12 months.

Cainiao and Hema will initiate the IPO process, with the former expected to be completed in the next 12 to 18 months and the latter to be completed in the next 6 to 12 months. Alibaba Global Digital Business Group will launch external financing to support its rapid expansion in the global market.

In March of this year, Alibaba Group Chairman and CEO Zhang Yong announced in a company-wide letter the launch of the "1+6+N" organizational reform. Under Alibaba Group, six business groups and multiple business companies will be established, and the 6 groups are made up of the Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics and Digital Media and Entertainment Group. After the organizational reform, Alibaba Group will implement holding company management.

As of the close of trading on May 19th, Alibaba's Hong Kong stock closed at HKD 82.45 per share, down 6.04%. The company's shares on the US stock market closed at USD 85.77 per share on the previous day, down 5.41%.

Regarding Alibaba Cloud's plan to go public independently within a year, the tech behemoth's financial report released on the evening of May 18th showed that the board of directors has approved the complete spin-off of Cloud Intelligence Group by distributing dividends to shareholders. Before the split, Alibaba plans to introduce external strategic investors for Cloud Intelligence Group through private financing. As part of the spin-off plan, Cloud Intelligence Group will seek to become an independent listed company. 

Alibaba's cloud business unit consists of Alibaba Cloud and DingTalk. After offsetting the impact of cross-division transactions, the revenue of the division in the fourth quarter of fiscal year 2023 decreased by 2% year-on-year to RMB 18.582 billion, and the adjusted EBITA was RMB 385 million, compared with RMB 276 million in the same period last year. 

The financial report also pointed out that the six major business groups have officially established a board of directors. In addition, Alibaba's board of directors has approved the establishment of a new capital management committee, which is responsible for planning and implementing comprehensive capital management to enhance shareholder value. The committee will review and decide on important matters related to Alibaba Group as a holding company, including various capital market transactions, shareholder return plans, subsidiary equity incentive plans, financing, listing, and spin-offs.