On the first day of the year, $Alibaba (BABA.US)$ / $BABA-W (09988.HK)$ a significant piece of news emerged.

On the evening of January 1, Alibaba Group announced that its subsidiary and New Retail have reached a deal with DE HONG Capital to sell all its shareholding in SUNART RETAIL for up to approximately 13.138 billion HKD, which accounts for 78.7% of the total issued shares of SUNART RETAIL.

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

Sell for 13.138 billion Hong Kong dollars.

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

Dehong 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 / Money Market and HKD 0.2 per share in interest), representing approximately 73.66% of the total issued shares of SUNART RETAIL, and 0.48 billion shares of SUNART RETAIL held by New Retail, which accounts for approximately 5.04% of the total issued shares of SUNART RETAIL. The total amount that Alibaba's subsidiaries and New Retail will receive is approximately 13.138 billion Hong Kong dollars.

In 2017, Alibaba first invested in SUNART RETAIL. After further increasing its shareholding 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 acquisition. On the night of January 1, 2025, the transaction was finalized.

According to the latest released interim financial results of SUNART RETAIL, the revenue for half a year was 34.708 billion yuan, and the net income was 0.186 billion yuan, achieving a turnaround from losses to profits. As of September 30, 2024, the number of employees at SUNART RETAIL Group was 85,778.

Some market participants analyze that this transaction of SUNART RETAIL can achieve a win-win situation for multiple parties. 'Dehong Capital is bullish on the consumer sector in the long term, seeking stable returns across cycles, and SUNART RETAIL's good foundation for digital transformation makes it an optimal symbol.' This person pointed out that the market is more optimistic about Alibaba, which is lightening its load. Over the past year, Alibaba has firmly executed its strategic focus, with clear priorities, looking to the future by better concentrating development resources on E-Commerce, Cloud Computing + AI in two major directions, 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 promote the enhancement of consumer experience through technological innovation, facilitating high-quality growth in the industry,' Alibaba announced.

Not long ago, the sale of Intime.

Earlier, on December 17, 2024, Alibaba announced in the Hong Kong Stock Exchange that the company had reached a deal with Youngor Group to sell all its shareholding in Intime to a buyer consortium formed by Youngor Group and members of the Intime management team for approximately 7.4 billion yuan.

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

"By concentrating resources on core business areas, Alibaba not only ensures the stability of its market share in the E-Commerce sector but also consolidates its leading position in the industry, while accelerating the rapid growth of emerging technology sectors such as Cloud Computing and AI," Jiang Han stated. This strategic adjustment helps Alibaba further optimize its capital structure and resource allocation, reducing the diversion of overall group resources by non-core businesses, thus advancing technological innovation and market expansion more efficiently, laying a solid foundation for long-term development.

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

Jiang Han believes that the platform resources and industry experience of Youngor Group will provide Intime with a broader market perspective and solid industrial support, helping it explore innovative paths in the Retail, Commercial Property, or other related fields.

Business sorting is in progress.

In a recent announcement, Alibaba Group stated that the sale of SUNART RETAIL is a good opportunity for Alibaba Group to monetize its non-core assets, allowing the funds obtained to further focus on core business development and enhance shareholder returns.

For some time, Alibaba has been orderly exiting non-core assets, and the strategic focus on the development of core businesses has become clearer. According to reporters from Brokerage China, Alibaba continues to focus on core business and related areas, and is returning value to shareholders by exiting non-core assets.

In September 2023, Alibaba Group established two strategic focuses: 'user-first' and 'AI-driven', and stated that it will conduct business sorting around these two key focuses.

Since then, Alibaba has prioritized the strategic sorting of existing businesses, clarifying its long-term focus and high-intensity investment in core business, continuously enhancing user experience, and ensuring products evolve iteratively in line with user demands; for non-core businesses, it aims to realize asset value through rapid profitability or other forms of capitalization to return value to shareholders.

Alibaba Group's Chairman of the Board of Directors, Cai Chongxin, stated that in the first nine months of the fiscal year 2024 (from April 1 to December 31, 2023), Alibaba had completed the sale of non-core assets worth $1.7 billion. 'We still have some traditional physical retail businesses on our balance sheet, which are not our core focus, so exiting these businesses is very reasonable,' noted Cai Chongxin.

In the second half of 2024, Alibaba also comprehensively integrated Taobao Tmall Group, the International Digital Business Group, and the E-Commerce businesses such as 1688 and Xianyu, forming an E-Commerce business group to better support merchants in capturing global market opportunities through significant synergies. South Korean E-Commerce platform ABLY stated on December 2, 2024, local time, that its parent company, ABLY Group, has received an investment of 100 billion Korean won (about 0.51 billion yuan) from Alibaba.

Editor/Somer