Wen / Ami, teacher
Edit / emily
Editor's note:
The high-profile BABA finally made a secondary listing in Hong Kong. In the prospectus, the new chairman and chief executive Zhang Yong mentioned at the beginning: we launched the listing in Hong Kong today, which is a new starting point for 20-year-old BABA. However, the 20-year-old company has had more than a decade of experience with Hong Kong's capital markets. As early as 2007, BABA listed its B2B business in Hong Kong, then privatised it in 2012, and finally went public in the US in 2014 because of the issuance system.
Although Hong Kong stocks missed the opportunity to list BABA as a whole, Ali's companies are mainly concentrated in Hong Kong stocks:Alibaba Health Information Technology (241.HK) of the big health sector, BABA film (1060.HK) of the big entertainment sector, and 6808.HK of the new retail sector., as well as the layout of finance, gambling and other fields, to take advantage of the opportunity of BABA's secondary listing in Hong Kong, systematically review the layout and performance of Ali shares in Hong Kong, and consider the choice of competing with the parent company in the future.
This article begins with the interpretation of the Hong Kong stock BABA series. Please look forward to the follow-up series.
Hong Kong stocks do not know the Ali system, even the old bird is in vain.
As an old friend and good comrade of the Hong Kong stock market, BABA has had a lot of neat operations in the Hong Kong stock market, including the complete return of BABA (1688.HK), the Ssangyong under the Hong Kong stock era (Double H backdoor), and the recent secondary listing after the seven-year itch (privatization in 2012). As a master of rhythm, the capital operation of the Ali system is art, and the sword goes astray. It's worth admiring.
BABA (9988.HK), who has returned to Hong Kong, is already the largest Internet giant in China by market capitalization. The expected market value after the offering is about HK $4 trillion, and the timing is just right. In the afterheat of Singles Day, the offering is expected to raise nearly HK $100 billion. Why does BABA, who is not short of money, raise money again?
On November 8, on the eve of Singles Day, BABA Group announced that it would invest 23.3 billion yuan to increase its stake in Cainiao Logistics by increasing capital and buying old shares, increasing its equity from about 51% to about 63%. Other existing Cainiao shareholders also participated in the new round of financing. Students who ask why financing are straightforward, these days, who will have a problem with money? it is always easier to spend money than to make money. the interesting thing about this capital increase is not the valuation, but that someone has quit. maybe when the rookie goes public, you'll know which big brother is going to quit this round.
There is so much about BABA's return to Hong Kong stocks that it is not interesting to watch again. It would be better to watch the small fragments under this big story and review the "Double H" strategy put forward by BABA as early as 2016: one H is happiness (happiness), and the other H is the landing of health (health). This article focuses on the health section. Alibaba Health Information Technology (241.HK) is now classified as "core business-retail business".
First, borrow the past.
On January 23, 2014, BABA joined hands with Yunfeng Fund to subscribe for 4.423 billion shares issued by Citic 21st Century (241.HK) at a price of 0.30 yuan per share in cash, with a total consideration of HK $1.326 billion, accounting for 54.33% of the enlarged share capital. The subscriber is mezzanine company Perfect Advance, which is 70.21% owned by Alibaba Investment Limited, a wholly-owned subsidiary of BABA Holdings, and 29.79% owned by products of Yunfeng Fund.
What is interesting is that the IPO price of 0.30 yuan per share is more than 60% discount to the average price (about 0.77 yuan per share) 10 days before the suspension. Even if we look further ahead, back to the average price (about 0.55 yuan per share) before the volume rise on January 2 and 6, 2014, it is still a discount of more than 45%. Although a large proportion of dilution, but BABA's light is really dazzling. In addition, at that time, the 21st century held the scarce operation right of "Drug Electronic Regulatory Code". As soon as the halo license plate met, it certainly won but countless people. After the announcement and resumption of trading, the stock price soared nearly 400%, and the highest achievement was reached 10 times in March of that year. There is no doubt that it is a great miracle of creating wealth.
During the period from 2014 to 2015, A shares were in the midst of a super bull market, and restless capital began to pour into Hong Kong stocks. A large share of discounted shares was a very popular way to buy a shell at that time. The basic formula is:
Issue a large proportion of discounted shares to the new powerful major shareholders, sell controlling shares and inject cash
The number of rights issues greatly exceeds the number of existing shares, so that after the rights issue, the original number of shares is almost negligible.
The rights issue price is greatly discounted on the basis of the market price.
In this way of selling shell, the acquirer can avoid the tedious procedures of the whole market and borrow the shell successfully directly. The money is injected into the listed company without giving it to the old shareholders, and the original shell owner recovers the cost by withdrawing from the market. The restless market sentiment and the endorsement of the star major shareholders all went up in the market environment at that time, and no one calculated the account. however, the time window of the "institutional dividend" was limited, and this strategy eventually evolved into a more extreme case. finally, there was even a cool operation of "97% discount and 13.6 times increase in equity". Finally, the listing rules 14.82 were cited on the Hong Kong Stock Exchange. Plug the loophole with the definition of cash company, and the case of backdoor failure will not unfold.
Historical dividends can not be replicated, all in the past. After successfully taking ownership, BABA changed his name to Alibaba Health Information Technology (241.HK), which started the capital operation of the health sector. in April 2015, Alibaba Health Information Technology announced that he would buy assets from Ali JK Investment and other assets with HK $19.448 billion. Alibaba Health Information Technology will pay the purchase consideration by issuing shares and convertible bonds, and the group will inject Tmall's online pharmaceutical business into listed companies. Due to changes in the health care reform policy environment and the regulatory environment in Hong Kong, the injection program was essentially suspended on March 31, 2016.
While injecting online pharmacy business into Alibaba Health Information Technology (241.HK), holding the industry's "drug electronic supervision code", which is also the largest pharmaceutical e-commerce platform in China, the rhythm of "referee + player" aroused a backlash in the industry. On January 25, 2016, Hunan Yangtianhe Pharmacy commissioned a lawyer to submit the complaint to the Beijing No. 1 Intermediate people's Court and take the State Food and Drug Administration to court. It is considered that the FDA's promotion of the business of the electronic regulatory network operated by Alibaba Health Information Technology violates the provisions of the Anti-unfair Competition Law and the Anti-Monopoly Law.
On February 24, 2016, 19 chain enterprises, including 603883.SH, 002727.SZ and 603939.SH, issued a joint statement saying: "Alibaba Health Information Technology's involvement in drug information supervision is not only related to national data security, but also creates unfair competition, and is suspected of kidnapping public rights to use data for profit. "
Timeline pull back now, take a look at the Ali news, according to "later LatePost" news, rookie is through the upgrade of the electronic face order in June this year, the green one-way express company is charging a technical service fee of 1 penny per order. In April 2015, Cainiao said that its electronic noodle order system would be permanently open to merchants and delivery companies free of charge. There is not only one sensible man in the industry. in some games, no matter what flag they hold high and what they are thinking, everyone knows that sensible people dare to be angry, but smart people will dare to speak up or not.
In this world, it is often, looking up full of doctrine, bowing the head is full of business.
Going back to the background at that time, BABA was still a newcomer in the field of medicine at that time, and he did not have an absolute dominant position in the field of e-commerce logistics, allowing pharmaceutical and circulation enterprises to raise a new private peer and hand in data. If you spend your own money to support your competitors, it will be obvious what it will be like in the next few years. There are plenty of sensible entrepreneurs in the industry, so you have to be angry to control your own destiny.
Even if you have dragon sword (flow), you have heavenly sword (technology), we also have bench (Konw how), there will be no problem after two moves, but when you come up wearing imperial gift yellow mandarin coat and holding imperial sword (supervision code), it is not appropriate that it belongs to the government, is it inappropriate? since you have stepped over the boundary Of course, the six factions are closely United to besiege the bright top.
Subsequently, the State Food and Drug Administration announced that it would terminate its cooperation with Alibaba Health Information Technology and suspend the mandatory implementation of electronic drug supervision codes. at the same time, Alibaba Health Information Technology issued an announcement that the work would be handed over, and the six major factions successfully captured the bright top. it has also become a rare lost battle of the Ali system. Subsequently, Alibaba Health Information Technology launched his own "code rest assured" platform, positioned as a traceability platform for drug information, but the imagination space has been broken, so far, it is a business with tens of millions of annual revenue, and the grand narrative will eventually fall into financial figures.
At this point, Alibaba Health Information Technology (241.HK) in the backdoor after the main capital operation is basically stagnant, waiting for a new pace of development.
2. Break it up into parts
After the miscarriage around the electronic drug regulatory code and Tmall's online pharmaceutical business in 2016, there was no large capital operation for the time being, interspersed with sporadic pharmacy acquisitions and strategic cooperation that did not affect the operation of the overall market until 2017.
On May 18, 2017, Alibaba Health Information Technology (241.HK) bought Blue Hat Interactive Entertainment Technology health food sold by Tmall from Ali JK Nutritional Products Holding Limited, a direct wholly-owned subsidiary of BABA Holdings, for a total consideration of HK $3.8 billion, excluding any medicinal wine, energy drinks, maternal health food and infant health food sold by Tmall. The purchase consideration was paid at HK $3.20 per share for the issue of 1.187 billion new shares, equivalent to an increase of 12.66% of the company's equity, and BABA's shareholding was further increased.
The target company of the acquisition is an offshore holding company, holding the following assets through a wholly foreign-owned enterprise: 1) the right of the target merchant to establish a relationship with all merchants in the sale of the target products in Tmall; and 2) the relevant marketing and operating personnel employment relationship with the management target merchant.
A wholly foreign-owned enterprise shall pay Tmall software service fee to Tmall in respect of the transaction in which Tmall sells the target products and uses the services provided by Tmall (equivalent to 50% of the software service fee charged by the wholly foreign-owned enterprise from the target business). The software service fee of a wholly foreign-owned enterprise shall be up to 3% of the completed sales value of the target products sold by Tmall, which shall be deducted from the receivables of the relevant target merchants and paid to the wholly foreign-owned enterprise after the customer confirms the receipt of the purchased products. The business logic is as follows:
On November 17, 2017, Alibaba Health Information Technology (241.HK) issued 442 million new shares to Ali JK Nutritional Products Holding Limited (a direct wholly-owned subsidiary of BABA Holdings) at a price of HK $4 per share, with an expected net subscription of HK $1.769 billion. The company intends to repay the loan, as funds for ongoing business operations and development, to complete past committed investments and future strategic acquisitions. BABA's shareholding proportion has further increased.
On May 28, 2018, Alibaba Health Information Technology (241.HK) acquired from Ali JK Nutritional Products Holding Limited (a direct wholly-owned subsidiary of BABA Holdings) Tmall's medical devices and health products; adult products; and medical and health services for a consideration of HK $10.6 billion. Its assets include: 1) the business relationship established by the target merchants with all merchants for the promotion and distribution of the target products in Tmall. 2) A number of relevant marketing and operation personnel who manage the relationship between the target merchants. The equity structure of the assets is similar to the category of Blue Hat Interactive Entertainment Technology health food injected in 2017, so it will not be repeated. The consideration will be HK $5.80 per share and 1.827 billion shares will be issued, equivalent to an increase of 15.66% of the company's share capital. BABA's shareholding ratio will be further increased.
What is more interesting is that, coincidentally, on May 28th, 2018, Hang Lung Properties (101.HK) auctioned the Hangzhou Baijingfang site for 10.7 billion RMB. The Baijingfang site is located in the core area of Hangzhou Wulin business district, surrounded by many well-known commercial complexes in Hangzhou, such as Wulin Yintai, Hangzhou Mansion, Central Mall, etc., known as "out-of-print treasure land" and has been evaluated as "the most valuable commercial land in Zhejiang Province".
That night, the company's TMT researchers and real estate researchers quarreled over more than 10 billion yuan, whether Alibaba Health Information Technology (241.HK) used to buy a Tmall category of operating income rights cost-effective, or Hang Lung Properties (101.HK) used to buy a Hangzhou land king cost-effective, in a sense, both are charter public format, TMT researchers said high growth, real estate researchers said strong certainty, each talking, chicken and duck talk. Finally, the two sides forcibly reached a consensus that Hangzhou is BABA and BABA is Hangzhou.
Finally, the veteran comrade who saw the finance and technology the next day came out to end the battle, and the glory went to BABA. According to this rhythm, the income right of each category of Tmall, every functional entrance of Alipay, all dismantled a listed company, and there were as many land kings as they wanted.
On May 23, 2019, Alibaba Health Information Technology (241.HK) issued 242 million new shares to Ali JK and 60 million new shares to Antfin at a price of HK $7.50 per share, with a total net financing of approximately HK $2.272 billion, which is intended to be used to repay loans, finance ongoing business operations and expansion, complete past committed investments and future strategic acquisitions.
It is worth noting that prior to this, Yunfeng Fund's previous shareholding through mezzanine companies has been distributed to the actual owner, in 2018, dismantled the mezzanine, Yunfeng Fund directly holds the equity of Alibaba Health Information Technology (241.HK) listed company through Innovare Tech Limited, search the announcement will find that on October 12, 2018, Innovare and Perfect Advance entered into a shareholder agreement, Advance has the preemptive right to buy the shares held by Innovare.
As the old saying goes: if we want to increase its market value, we must first expand its equity, expand its statements, build its ecology, and strengthen its dreams.
Not every backdoor can have the help of Evergrande Health (708.HK). With the continuous injection of business, cash, mergers and acquisitions, partners and other capital operations into listed companies from 2017 to 2019, Alibaba Health Information Technology's listing platform now has a lot of layout around the health industry. At the same time, through pharmaceutical e-commerce business, especially proprietary e-commerce business, the revenue has been brushed up quickly, if it is only e-commerce business, whether it is proprietary or platform. There are mature valuation methods in the industry, putting aside the aura of wealth and handsome medicine and BABA's bonus, how to value, that is a matter of opinion.
Third, the hand of God
If we only rely on the pharmaceutical sales business, whether it is online self-management, platform, or offline drugstores and new retail, it is only a vertical category of sales business, which can brush the water, but to boost the valuation, we still have to rely on ecology and transformation.
Therefore, after BABA joined the government, in addition to drug circulation, but also made a lot of layout in the entire field of medical science and technology. In the financial results of 2018 and 2019 (Alibaba Health Information Technology's financial year takes March as the cycle), investors in the field of health should pay attention to it. Because you can imagine the industry innovation, he has dabbled in and achieved results. In addition, by the way, you can also enjoy the wonderful Chairman's report, such as the opening of the 2019 annual report:
Starting with the phrase "those who know change with time, those who know make things according to things" set the tone, and then "climate, geography, human harmony" lead to the opportunities of the times, followed by a "no hard work, no gain" review of work, followed by a "conform to the trend, there is great potential" to look forward to the future, the last sentence "the greater the ability, the greater the responsibility".
At this level of copywriting, it is really so high that there are no friends.
Back to the point, among the many future business layouts, in addition to drug circulation, what is more eye-catching is the Internet medical business, which revolves around the networking of medical services, which is the great advantage of BABA as a technology tycoon. The major developments mentioned in the 2019 financial report are:
In January 2019, Zhejiang Bian Que Health data Technology Co., Ltd., jointly invested by the Group and Ant Financial Services Group, officially released the "Zhejiang Internet Hospital platform". This is the first Internet hospital platform (enterprise-government-business-consumer) (B2G2B2C) that integrates regulatory and service capabilities in the country, and is of great milestone significance in the field of Internet medical treatment. The platform is the general entrance of Internet hospitals and Internet diagnosis and treatment services in Zhejiang Province, and is composed of service sub-platform and supervision sub-platform. The service sub-platform takes the patient as the center and forms a unified entrance to the Internet hospital service on Alipay. The supervision sub-platform is a platform for the competent department to supervise the Internet diagnosis and treatment activities carried out by medical institutions beforehand, during and after the event. From its establishment at the beginning of the year to April 2019, more than 20 medical institutions, including third-class hospitals, have settled into the platform, and have received applications from more than 300 medical institutions. With its professional operation and good development, Zhejiang Internet Hospital platform has become a model project of the National Health Commission.
Relying on BABA's territorial resources, a very high-profile Internet hospital platform has been quickly landed in Zhejiang, which can be expected to be a very important entrance in the future. The project company with this platform is Xijiang Bian Que Health data Technology Co., Ltd., previously a wholly-owned subsidiary of Alibaba Health Information Technology. On June 1, 2018, Shanghai Yunxin (Ant Financial Services Group wholly-owned subsidiary) added 40 million yuan in cash. With a 40% stake, Hangzhou Yunting (a third-party data technology company) has a cash capital increase of RMB 15 million and a stake of 15%. After the capital increase, the listed company holds only 45% of the equity of the joint venture company.
This is precisely the biggest difficulty in investing in Ali companies, because they are like a prodigal son, you can never have a complete him.
Ali's capital operation ability is very strong, the grasp of the macro trend is extremely accurate, the understanding of all kinds of systems is unparalleled, after all, calculated by the divine operator, there must be no last resort, most outsiders can only appreciate, it is difficult to participate. Can participate in it only with the divine operator to calculate the friend door, this kind of wisdom and near demon financial and technical ability falls to the specific subsidiary, is all kinds of complexity, to Alibaba Health Information Technology (241.HK), the history of the core transactions are turned over minutes are exhausted, to have this free time, it is better to drink two bowls of Ma teacher's chicken soup to make up the body … What's more, it is even more difficult to judge value in this complicated information from the perspective of service decision-making. this difficult and mysterious phenomenon, jianghu people say:
BABA system uncertainty theorem.
In addition, because the light of the Ali system is too dazzling, market sentiment often gives a very high emotional premium, volatility will be much higher than ordinary companies, even the market game is difficult to make money.
However, from a practical and realistic point of view, no matter how much you move, public grain will still have to be handed over, which means that no matter which line of business it is, or more or less will be gathered to BABA's parent company, therefore, even if you are optimistic about a certain line of business under the Ali system, you can only turn to the trend of the whole Ali system, from the uncertainty of the game of private grain to the certainty of embracing public grain.
Can represent the trend of Ali, there is and only the ultimate holding company BABA (9988.Hong Kong BABA.N).
Conclusion:
In fact, as long as we understand the governance structure of the Ali system, we can understand that the value of management is greater than ownership.
Therefore, controlling more resources is their principal contradiction. The gain and loss of one city and one pool is only the secondary contradiction, not the primary consideration. In such a huge system and such complex related party transactions, they try to surpass the traders and judge the gains and losses of one city and one pool often outweigh the gain.