Alibaba May Sell Yintai But Its Buyer Undecided

 

On December 16, there were rumors that Alibaba (NYSE: BABA) (HKG: 9988) was negotiating with Yintai Commerical Group about selling Alibaba's stake in Yintai to Youngor Fashion Co Ltd (SHA: 600177), China's textile and apparel industry leader.

 

Yintai is a department store company in China covering the business of department stores and shopping centers. On March 31, 2014, Alibaba invested about $691 million in Yintai, obtaining no less than 25% of the company's shares and ranking as Yintai's second-largest shareholder. In June 2014, Alibaba and Yintai established the “New Yintai” joint venture to co-build a retail O2O model.

 

In 2015, Alibaba increased its stake in Yintai and became the latter's largest shareholder. Yintai was seen as the first business carrier for Alibaba's new retail. In May 2017, Alibaba and Shen Guojun privatized Yintai, making it Alibaba's new retail segment.

 

However, the relationship between Alibaba and Yintai changed in March 2023. After Alibaba split itself into six separate units, rumors emerged in the market that Alibaba planned to sell Yintai. Alibaba's subsequent denials did not stop the rumors.

 

In early 2024, rumors claimed that Alibaba had approached several companies to gauge their interest in acquiring Yintai. At Alibaba's earnings meeting in February 2024, Alibaba's chairman Joseph Tsai said that Alibaba's sale of its non-core assets went well. Although Alibaba's balance sheet still has many brick-and-mortar retail businesses, it still makes sense to sell these non-core businesses. However, challenging market conditions have left Alibaba needing time to complete the sale of Yintai.

 

Alibaba and Yintai have yet to respond to the rumors. Youngor has responded that the company has no information that should be disclosed but has not been.