Alibaba returns above the 10-day moving average, how are Cainiao and Hema progressing in their IPOs?
From a technical analysis perspective, Alibaba may consider accumulating below HK$85, with resistance at HK$98. If it doesn't fall below HK$80.5, it is advisable to continue holding.
In May 2023, Alibaba released its earnings report and disclosed the directors and CEOs of its six major business groups approved by the Alibaba Group's board of directors. Alibaba will promote the listing of its subsidiaries Alibaba Cloud, Cainiao, and Hema.
Cainiao Takes the Lead
Alibaba's restructuring efforts have shown initial results, with revenue growth recorded for all six business groups as of the end of the quarter in June this year.
Reports suggest that Cainiao, the logistics subsidiary of the group, is expected to file for an IPO in Hong Kong as early as this week, aiming to raise at least $1 billion (approximately HK$7.8 billion), but the final valuation is yet to be determined.
Cloud revenue growth was affected last quarter due to the decline in demand for remote work and online courses after the pandemic. With the rapid development of artificial intelligence (AI), there are high expectations for how Alibaba will monetize this technology.
Delay in Hema's IPO
According to foreign media, Alibaba Group is putting on hold the potential initial public offering of its subsidiary Hema Fresh supermarket chain in Hong Kong due to weak sentiment in the consumer sector.
Alibaba believes that the valuation of Hema Fresh may be around $4 billion, lower than the target of $6 billion to $10 billion set when considering private financing in 2022.
The Alibaba Capital Management Committee recently decided to wait for a more favorable market before proceeding with Hema's IPO and will prioritize the listing of other departments.
Alibaba originally expected Hema Fresh to go public within the next 6 to 12 months.
Technical Analysis
Looking at the daily chart of Alibaba, last Friday showed a "large bullish candle" crossing above the 10-day moving average, with the STC%K line rising above the %D line. The MACD maintains a bearish divergence. It may be considered to accumulate below HK$85, with resistance at HK$98 for any rebound. Hold the stock as long as it does not fall below HK$80.5.
