6 December 2021
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2 min.
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There will be no delisting in the US
On Monday, Alibaba (BABA) announced that it will restructure its international and domestic e-commerce business by creating two independent divisions to "grow more smoothly and quickly."
The International Digital Commerce Department will include AliExpress, Alibaba.com and Lazada division will be headed by Jiang Fan, former president of Taobao and Tmall. The Alibaba's domestic commerce business will be transferred to the China Digital Commerce Department, and will be led by one of Alibaba's founders Trudy Dai.
In addition, Alibaba's deputy chief financial officer Toby Xu will replace Maggie Wu as the company's chief financial officer from April. At the same time, Wu will continue to serve as an executive director on Alibaba's board of directors.
These changes are likely an attempt by Alibaba to respond to increased regulatory pressure from the US and China.
Alibaba shares are at a low
The company faces a number of obstacles to growth, including:
- Risks of further antitrust action by Chinese regulators (Alibaba has already been fined $2.75bn).
- Risk of delisting from the NYSE if Alibaba refuses to open its books to US scrutiny.
- A weakened competitive position due to the growth of competitors in the market (Alibaba's last quarterly report was worse than rival JD.com).
- Analysts described Alibaba's sales growth rate during the year's biggest single day sale ("11.11") as the slowest ever.
- China's slowing economy.
Given the slowdown and increased competition, Alibaba recently lowered its 2022 revenue growth forecast to a rate of 20-23%, down from its previous growth forecast of 30% and the slowest growth rate since Alibaba debuted on the US stock market in 2014.
Alibaba (BABA) shares fell to further lows last week on fears of delisting from the NYSE after Didi (DIDI) said it would start delisting from the NYSE and plan to list in Hong Kong instead. Trading signals and forecasts for Alibaba shares.
"Political concerns remain a key factor," said Selina Sia, head of equity research in China at Credit Suisse Private Banking, referring to the fall in Alibaba shares.
It is worth noting that China's regulator has denied reports of a ban on domestic companies with VIE structures listing overseas.
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Head of Greater China Equity Research for Private Banking & Wealth Management at Credit Suisse
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