Alibaba: Shedding Sun Art To Illuminate E-Commerce

Summary:

• Alibaba sold its 73.66% stake in Sun Art to DCP Capital for US$1.6bn, reflecting a shift away from its New Retail strategy.
• The sale is positive as Sun Art faces a competitive offline retail market and Alibaba is focusing on its Freshippo brand.
• Alibaba’s disposal strategy includes potential sales of non-core assets like Youku and Alibaba Pictures to concentrate on e-commerce and global expansion.
• Despite the asset sale, the broader consumption downgrade in China favors retail cost leaders, maintaining a cautious view on Alibaba’s stock.

As expected (see: Alibaba: The End Of New Retail As We Know It?), Alibaba (NYSE:BABA) sold its 73.66% stake in Sun Art department store to DCP Capital for gross proceeds of HK12.3bn, or US$1.6bn. BABA made

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