The IPOX® Update 11/16/23
Alibaba Halts Spinoff Amid US Chip Restrictions
Chinese e-commerce giant Alibaba has withdrawn plans to spin off its cloud division, Alicloud, due to new U.S. chip restrictions, causing an 9% drop in its stock. Despite a 8.5% increase in Q2 revenue, reaching 224.8 billion yuan ($31 billion), its Chinese retail sector underperformed. Alibaba reported a significant swing to a 27.7 billion yuan profit and simultaneously announced the suspension of its Freshippo IPO and a $2.5 billion dividend. Chairman Joe Tsai emphasized prioritizing growth over financial engineering for Alicloud. Newly appointed CEO Eddie Wu is set to refocus on AI, internet platforms, and global commerce to redefine Alibaba's core businesses. However, concerns about China's AI chip supply have intensified due to US restrictions and uncertainties surrounding SMIC's capabilities. The news adversely affected U.S.-listed Chinese stocks, including Pinduoduo and JD.com, both experiencing notable declines. (Source)
Siemens Explores IPO for Innomotics, Valued at €3 Billion
German industrial conglomerate Siemens is considering an IPO for its Innomotics large drive unit, a leader in large drives and motors, currently valued at around €3 billion. Exploring alternatives including a sale, Siemens is collaborating with BNP Paribas for this venture. Innomotics, boasting a strong business and healthy order book, comprises Large Drives Applications and three other units, employing over 15,000 people. Effective July 1, Siemens' German large drive business became legally independent, a step towards Innomotics' full independence, fortifying its sector positioning. The operational headquarters of Innomotics is located in Nuremberg. This move indicates Siemens' strategic focus on strengthening and potentially realizing the value of its high-performing units through public listings. (Source)
Starlink IPO Advances to Late 2024 as Subscriber Base Grows
SpaceX, the American aerospace manufacturer and space transport services company, is preparing its subsidiary Starlink for an IPO possibly in late 2024, earlier than anticipated. Starlink, now available in over 60 countries with a growing base of 2 million subscribers, is expected to become SpaceX's top revenue source. The satellite service's sales are forecasted to hit $10 billion in 2024, with potential to reach $30 billion annually. SpaceX's current revenue is on track for $9 billion, with projections increasing to $15 billion in 2024. Leading in satellite ownership, SpaceX plans to expand its constellation to 42,000 units by next year. This development positions Starlink as a significant player in the satellite internet market, rivalling Amazon's Project Kuiper, which aims to add 3,236 satellites and begin operation by the end of 2024. (Source)
Sanofi Considers IPO for Consumer Health Division, Valued Over $ 20 Billion
French multinational pharmaceutical company Sanofi is in early-stage discussions for a separate listing of its consumer health division, potentially valued over $20 billion. The company, known for its diverse range of pharmaceutical products, is consulting Rothschild for this spinoff. The division, attracting interest from major buyout firms for a potential acquisition, includes popular OTC products like Phytoxil, Icy Hot, and Dulcolax. While the outcome of these deliberations remains uncertain, Sanofi's move indicates a strategic shift to focus on its core pharmaceutical business. The company's shares saw a marginal increase of 0.1% to €83.76 in early Paris trading. This potential IPO could offer investors an opportunity to participate in a standalone consumer health business with a strong product portfolio. (Source)
Renault's Ampere Unit Eyes IPO, Targets Over €10 Billion Revenue by 2025
French automobile manufacturer Renault is pitching an IPO for its electric-vehicle unit, Ampere, with positive feedback from analysts. The target for Ampere is to achieve over €10 billion ($10.9 billion) in revenue by 2025. The proposed IPO, aimed for the first half of 2024, comes amid concerns over valuation and strategy. Renault's plan includes the rejuvenation of the Twingo city car for the EV market, aiming to offer it for under €20,000 from 2026. This move could mark a significant turning point in the market, especially given the current challenges in European IPOs. Some analysts, however, question the necessity of the IPO, noting Renault's adequate funding and potential complexities in business split. Renault also considers selling a 28% stake in Nissan, valued at about €4.3 billion ($4.69 billion), as an alternative source of funding. (Source)
