Alibaba Further Reduces Holdings in Former "Top Intra-City Freight" Stock GOGOX

Industrials Author: EqualOcean News, Jiahui Liao Editor: Yiru Qian Feb 07, 2024 06:08 PM (GMT+8)

In fact, this marks Alibaba's sixth move within the past three months.

Chinese express

The Hong Kong Stock Exchange disclosed documents last night, showing that Alibaba (BABA:NYSE; 9988:HK) reduced its holdings of GOGOX by 1.2172 million shares, decreasing its stake from 5.07% to 4.88%. The average selling price ranged between HKD 0.352 and HKD 0.385 per share.

In early January of this year, Alibaba reduced its holdings of GOGOX by a total of 669,400 shares, decreasing its stake from 8.04% to 7.93%, with the proceeds amounting to approximately HKD 370,000.

On June 24, 2022, GOGOX successfully debuted on the Hong Kong Stock Exchange with the stock code 2246, with a market value of around HKD 10.3 billion. At the time of listing, Alibaba indirectly held 12.26% through its subsidiaries Taobao China, Cainiao, and the investment fund Alibaba Hong Kong Entrepreneurs Fund, L.P., with respective stakes of 12.26%, 2.69%, and 0.02%. At that time, Alibaba held 92.1453 million shares of GOGOX, with a total investment of approximately HKD 1 billion, representing a stake of 14.97%.

However, shortly after GOGOX's listing, the stock price fell below HKD 10 per share. Three months later, according to disclosures from the Hong Kong Stock Exchange, Alibaba began reducing its holdings of GOGOX, cumulatively selling 6.0324 million shares within the first three months of the listing, reducing its stake to 13.99%. Based on the average selling prices within the period, the proceeds from the sales amounted to nearly HKD 50 million.

On November 6, 2023, Alibaba announced the reduction of 255,600 shares, followed by further reductions of 4.7176 million shares on December 12, 136,940 shares on December 15, and 838,400 shares on December 22, totaling approximately 7.5948 million shares. Calculated based on the respective average selling prices, the cumulative proceeds from these five reductions amounted to approximately HKD 4.8 million.

Not only Alibaba, but also former chairman Xiaohua Chen, 58 Daojia, 58 Tongcheng's founder and CEO Jinbo Yao, and other institutional and individual shareholders have been reducing their holdings.

Established in 2014, GOGOX, formerly known as 58 Express, is a leading online intra-city logistics platform in Asia, committed to providing technology-driven, customer-centric logistics solutions, positioning itself as a "ride-hailing platform for freight."

In 2017, through the acquisition of Hong Kong's GOGOVAN, the company completed its brand renewal and international layout. GOGOX's business covers more than 340 cities in mainland China, Hong Kong, Singapore, South Korea, India, and Vietnam, operating the "GOGOX" brand in mainland China and the "GOGOX" brand in other countries and regions in Asia.

At the time of its listing on the Hong Kong Stock Exchange, GOGOX was hailed as the "first stock in intra-city freight." However, from 2018 to 2022, GOGOX incurred losses of RMB 1.071 billion, 184 million, 658 million, 873 million, and 1.209 billion respectively, accumulating losses of nearly RMB 4 billion over five years. According to the semi-annual report of 2023, the company recorded a loss of RMB 640 million in the first half of 2023, indicating that GOGOX still faces significant challenges in terms of profitability, which is one of the reasons for Alibaba's reduction of holdings.

Furthermore, the management of GOGOX has also started to experience turbulence. In December of last year, GOGOX announced that its founder, Xiaohua Chen, resigned as chairman and executive director due to personal affairs and withdrew from the nomination committee. Secretary Yongshi Yu and independent non-executive director Zhengdong Ni also resigned.

As of the time of writing, GOGOX closed at HKD 0.35 per share, with a market value of approximately HKD 220 million.