Highest price of HKD 13.1 billion! On the first day of the new year, Alibaba sells SUNART RETAIL to DHH Capital

On the first day of the new year, Alibaba announced a major piece of news.

On the evening of January 1, Alibaba Group announced that its subsidiary and New Retail reached a deal with DHH Capital to sell all of its equity in SUNART RETAIL for a maximum of approximately HKD 13.138 billion, accounting for 78.7% of SUNART RETAIL's issued shares.

Alibaba stated that the company will continue to focus on its core business and enhance shareholder returns.

Selling for HKD 13.138 billion

The announcement indicated that on December 31, 2024, Alibaba's subsidiary and New Retail entered into a sales agreement with DHH Capital.

DHH Capital will acquire 7.027 billion shares of SUNART RETAIL held by Alibaba's wholly-owned subsidiary Jixin and Taobao China at a maximum overall price of HKD 1.75 per share (including HKD 1.55 per share in cash and HKD 0.2 per share in interest), which accounts for approximately 73.66% of the total issued shares of SUNART RETAIL, as well as 480 million shares held by New Retail (accounting for approximately 5.04% of the total issued shares). The maximum amount to be received by Alibaba's subsidiary and New Retail is approximately HKD 13.138 billion.

In 2017, Alibaba first invested in SUNART RETAIL. After further increasing its stake in 2020, SUNART RETAIL became a consolidated subsidiary of Alibaba Group.

In October 2024, SUNART RETAIL announced to the market that there were buyers interested in acquiring it. On the evening of January 1, 2025, the transaction was finalized.

According to the latest mid-year financial results released by SUNART RETAIL, the revenue for the half-year was RMB 34.708 billion, with a net profit of RMB 186 million, achieving a turnaround from losses to profits. As of September 30, 2024, SUNART RETAIL Group had 85,778 employees.

Market analysts believe that this transaction involving SUNART RETAIL allows multiple parties to achieve a win-win situation. "DHH Capital has long been optimistic about the consumer sector, pursuing stable returns across cycles. The solid foundation of SUNART RETAIL's past digital transformation makes it a preferred target," the analyst pointed out. The market is more optimistic about a leaner Alibaba, which has firmly executed strategic focus over the past year, making clear choices and better concentrating development resources on e-commerce and cloud + AI, driving long-term growth in core business.

"Alibaba Group has always been confident in the potential of the Chinese consumer market. Looking to the future, the company will continue to drive improvements in consumer experience through technological innovation and promote high-quality growth in the industry," Alibaba announced.

Recently Sold Intime

Earlier, on December 17, 2024, Alibaba announced on the Hong Kong Stock Exchange that it had reached a deal with Youngor Group to sell all of its equity in Intime for approximately RMB 7.4 billion to a buyer consortium composed of Youngor Group and members of the Intime management team. **

At that time, Jiang Han, a senior researcher at the Pangu Think Tank, stated that this is the best arrangement for both parties. For Alibaba, this move reflects its ability to continuously deepen strategic focus and optimize resource allocation.

"By concentrating efforts on core business areas, Alibaba not only ensures the stability of its e-commerce market share and consolidates its leading position in the e-commerce industry but also accelerates the rapid growth of emerging technology sectors such as cloud computing and AI," Jiang Han said. He noted that this strategic adjustment helps Alibaba further optimize its capital structure and resource allocation, reducing the dispersion of overall resources caused by non-core businesses, thereby promoting technological innovation and market expansion more efficiently, laying a solid foundation for long-term development.

In fact, with Alibaba's investment and support, Intime's digital transformation and instant retail model have been implemented, improving operational efficiency and service experience, providing a reference for the transformation of traditional retail. As of now, Intime Commercial has 60 department stores nationwide and several projects awaiting opening.

Jiang Han believes that the platform resources and industry experience of Youngor Group will provide Intime with a broader market perspective and strong industrial support, helping it explore innovative paths in retail, commercial real estate, or other related fields.

Business Restructuring in Progress

Alibaba Group stated in its latest announcement that the sale of Sunart Retail is a good opportunity for Alibaba Group to monetize its non-core assets and use the proceeds to focus more on core business development and enhance shareholder returns.

For some time, Alibaba has been orderly exiting non-core assets, and the signal for strategic focus on core business development has become clearer. Journalists from Securities China also learned that Alibaba continues to focus on core businesses and related fields, returning value to shareholders through the exit of non-core assets.

In September 2023, Alibaba Group established two strategic focuses: "User First" and "AI Driven," and stated that it would reorganize its business around these two focuses.

Since then, Alibaba has prioritized its existing businesses strategically, clearly maintaining long-term focus and high-intensity investment in core businesses, continuously enhancing user experience, and ensuring that products evolve in line with user needs; for non-core businesses, it aims to realize asset value through quick profitability or other capitalizing methods to return value to shareholders.

Alibaba Group Chairman Joseph Tsai once stated that in the first nine months of the 2024 fiscal year (from April 1, 2023, to December 31, 2023), Alibaba had completed the sale of $1.7 billion in non-core assets. "We still have some traditional physical retail businesses on our balance sheet, which are not our core focus, so exiting them is very reasonable," Joseph Tsai pointed out.

In the second half of 2024, Alibaba also fully integrated the Taobao Tmall Group, International Digital Business Group, as well as e-commerce businesses like 1688 and Xianyu, establishing an e-commerce business group to better support merchants in capturing global market opportunities through significant synergies. The South Korean e-commerce platform ABLY announced on December 2, 2024, local time, that its parent company, ABLY Group, has received an investment of 100 billion Korean won (approximately 510 million RMB) from Alibaba Risk Warning and Disclaimer

The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk