China's Alibaba Group Holding Ltd is putting a potential Hong Kong initial public offering of its Freshippo grocery chain on hold amid weak sentiment for consumer stocks, Bloomberg News reported, citing sources.
The Chinese technology conglomerate has concluded it could likely achieve a valuation of around $4 billion for Freshippo, which is lower than the $6 billion to $10 billion it was targeting when it considered raising a private funding round last year, according to the report.
Alibaba said in May that Freshippo's IPO would be completed in six to 12 months and that it was also considering listing its logistic unit, Cainiao.
Alibaba's capital management committee, which is overseeing the breakup of the company, recently decided to wait for a more favourable market before moving forward with a Freshippo IPO and will prioritise listings of other units, the report added.
Alibaba did not respond to a Reuters request for comment.
Restructuring Plan
In a massive restructuring announced in March, Alibaba said it would split into six units and explore fundraising and listing for most of them, as China eased on its regulatory crackdown on local technology companies.
Reuters reported last year that Freshippo was seeking to raise funds at a valuation of about $6 billion, much lower than a hoped-for valuation of up to $10 billion earlier.
The Freshippo business is a supermarket chain in China and also offers services like dine-in and 30-minute home delivery. Launched in 2016, it had 273 stores as of March 2022, according to its website.
In August, Alibaba Group Holding reported its strongest quarterly revenue growth in almost two years as its domestic e-commerce unit focuses on low-cost products to attract consumers amid a sober economic environment.
