Alibaba announced on the Hong Kong Stock Exchange on the evening of November 10announcement, announced that the Hong Kong Stock Exchange has confirmed that it can spin off its wholly-owned subsidiary Pingtou Ge and allow Pingtou Ge to be independently listed on the main board of the Hong Kong Stock Exchange as H shares. Pingtou Ge is a data center chip company owned by Alibaba. The announcement describes it as "a leading full-stack data center chip supplier in China."
The announcement also revealed that Pingtou Ge submitted a listing application form (A1 form) to the Hong Kong Stock Exchange in a confidential manner on September 11. After the spin-off, Pingtouge is expected to remain a subsidiary of Alibaba.
The issuance scale and shareholding ratio have not yet been determined.
According to the announcement, Pingtou Ge plans to list through a global offering, including a Hong Kong public offering and placement to institutional and professional investors. The scale and structure of the offering, as well as how much Alibaba’s shareholding in Pingtou Ge will be reduced, have not yet been finalized.
The spin-off still has to go through several hurdles: the Listing Committee of the Hong Kong Stock Exchange approves Pingtou Ge’s H-share listing, completes the filing with the China Securities Regulatory Commission, and Alibaba and Pingtou Ge make the final decision. Alibaba reminded in the announcement that there is no guarantee whether or when the spin-off will be carried out.
The reasons listed by Alibaba for the spin-off include: allowing investors to separately evaluate the value of Alibaba's other businesses and Pingtou Ge, attracting funds specifically interested in investing in the chip business, and allowing Pingtou Ge to raise funds in the stock and bond markets on his own in the future, making it easier to obtain bank financing.
Alibaba shareholders have no guaranteed quotas
Hong Kong Stock Exchange rules originally required listed companies to be spun off to take care of existing shareholders and provide "guaranteed quotas" for the new company's shares, such as direct distribution of shares or allowing shareholders to subscribe first. Alibaba applied for exemption, and the Hong Kong Stock Exchange has agreed.
The reasons raised by Ali include: if a guaranteed quota is to be granted, the U.S. Securities and Exchange Commission requires Pingtou Ge to be publicly offered in the United States and registered with the U.S. Securities and Exchange Commission (SEC), which is too cumbersome; Chinese law imposes lock-up restrictions on existing shares before the offering; and based on Ali's total assets, revenue and net profit, this spin-off is not significant to Ali. Alibaba also expects that the spin-off will not constitute a discloseable transaction.
Zhenwu chips are the main products
Pingtou Ge is the main body of Alibaba’s self-developed AI chips.CNBC reports, Alibaba released a new generation of AI chip Zhenwu V900 in September, saying that the performance is three times that of the previous generation Zhenwu M890 launched in May. In April this year, Alibaba also cooperated with China Telecom to launch a data center deploying tens of thousands of Zhenwu processors (Related reports).
The United States continues to restrict China's access to advanced AI chips, and Chinese companies such as Alibaba and Huawei are developing their own alternatives. CNBC also pointed out that China’s financial regulators have stepped up scrutiny of the listing of technology companies and the influx of funds into related industries in recent months.
this article Alibaba spins off its AI chip subsidiary Pingtouge to go public in Hong Kong, with no guaranteed quota for shareholders first appeared in Chain News ABMedia。
