On May 31st, Suning Tesco announced that the 2017 Annual General Meeting of Shareholders reviewed and approved the Proposal on Authorizing the Company's Management to Select Disposal of Some Available-for-sale Financial Assets. After the resolution is passed, the Suning management layer will hold the company. The Alibaba Group’s shares were chosen for sale and it is expected that the total size of the sold shares will not exceed 7.66 million shares, accounting for approximately 0.3% of Alibaba Group’s shares.
According to the announcement, as of the announcement date, Suning's Tesco has completed the sale of the shares through the New York Stock Exchange, and received a stock sale price of approximately US$1.504 billion. After deducting related costs and expenses, it is estimated that it will obtain a net profit of 5.601 billion yuan.
After the sale was completed, Suning still held approximately 13 million Ali shares, which accounted for 0.51% of its current total issued shares. The announcement stated that Suning will correct the 2018 semi-annual results after the sale is completed.
In 2017, Suning Tesco sold 5.5 million shares of Alibaba shares and earned a net profit of 3.284 billion yuan. In 2017, Suning’s annual net profit was only 4.213 billion yuan. A case of realisable financial assets increased Suning’s net profit year-on-year. 498%. There are clouds, 'On the stocks, I only serve Suning!' The ancients do not bully me!
Looking back at 2015, Suning and Ali, who were still playing against each other the previous day, decided to marry each other, so that everyone could not help but sigh at the repeated shopping malls. After the “marriage”, the two parties held each other’s shares and Alibaba subscribed Suning 19.99 for 15.17 yuan. Shares, total subscription amount of 28.3 billion; Suning subscribes Ali to no more than 27.8 million Amway shares for US$81.51. The total subscription amount is approximately RMB 14 billion.
The announcement indicated that since the cooperation of “Cating”, the cooperation between the two sides in retailing, logistics services, etc. has been deepening, and the cooperation has achieved significant results. The funds obtained from this sale of Ali stock will be used to support Suning’s expansion in channels, commodities and Investment and business development in areas such as science and technology research and development to enhance the company's market competitiveness and enhance the company's operating efficiency.
At present, Alibaba Group still holds a 19.99% stake in Suning's Tesco. Suningfang also stated that 'Alibaba Group is the company's most important strategic partner. The company will integrate its own resources and continue to deepen joint procurement with Ali. The strategic cooperation in the areas of store operations, logistics services, O2O integration, etc. continues to enhance the value of cooperation and market competitiveness of both parties.
In recent years, Suning has seized the opportunity for online integration under the “new retail” line and has been aggressively subsidizing the county market in the absence of satisfactory results from the transformation line business. It will open a new business of “retail cloud” in early 2018. , And Suning Tesco outlet stores together constitute the Suning sinking three-fourth market retail outlets.
Statistics of Suning show that the huge and stable stock market in the county's low-line market exceeds 900 billion yuan in the whole year. Affected by the smooth release of replacement demand, the growth rate of large household appliances in the third- and fourth-tier markets is significantly better than that of the first-tier and second-tier markets. With regard to the environment with high incremental space and small kitchens, the 3rd and 4th lines have also released tremendous growth potential. Urbanization and consumption upgrades are expected to maintain the company’s imagination growth rate at around 28%.
In the overall market, Suning’s traditional advantages in household appliances have recently highlighted the trend. Suning’s home appliances account for 20% of the retail market share. In the 3C field, Jingdong is even more advanced, accounting for approximately 19% of the market's retail share.
Relying on the advantages of supply chain and store operations, Suning plans to develop 5,000 'big, small, multi-purpose' strategic storefronts in 2018 to consolidate the advantages of the offline market.
At present, Ali is also actively laying out its offline store business in its new retail strategy. The cooperation of 'Cat Ning' is still limited to the online domain. In the future, can the two parties infiltrate into their respective channel chains, cross-use resources, or More beneficial exploration than mutual holdings.