Alibaba Group Holding Limited is set to enhance its autonomous logistics capabilities through a significant merger involving its Cainiao logistics subsidiary's self-driving delivery division and Zelos Technology, a specialized Chinese robovan manufacturer. This union is anticipated to create a combined company valued at approximately $2 billion, according to multiple insiders familiar with the arrangement.
Under the terms of this deal, Cainiao will acquire an equity stake in Zelos Technology, which will assume operational control over the merged entity. This reorganization means that Alibaba's unmanned vehicle business, previously part of Cainiao, will be integrated into Zelos, consolidating efforts in advanced robotic delivery systems within one unit.
Despite the merger, Cainiao Robovan will maintain its brand identity and continue operations as an independent brand within the larger framework. Furthermore, representation from Cainiao will be formalized with a seat on Zelos Technology’s board, ensuring strategic oversight and alignment between the parent logistics arm and the combined autonomous driving operations.
Alibaba's shares have experienced significant appreciation, climbing by 81% over the past year. This robust performance is largely attributed to sustained growth momentum in Alibaba's cloud computing and artificial intelligence divisions, alongside a stabilizing position in its core e-commerce business segment.
In its recently reported fiscal second-quarter results, Alibaba posted total revenues of $34.81 billion, marking a 5% increase year over year and exceeding consensus analyst expectations of $34.43 billion. On a comparable basis, excluding revenues from businesses that were divested, the revenue growth would reflect a stronger 15% expansion.
Adjusted earnings per American Depositary Share were reported at 61 cents, surpassing the estimated 49 cents. However, the company’s profitability metrics were pressured by increased operational investments. Adjusted net income declined 72%, amounting to $1.45 billion, with adjusted earnings before interest, taxes, and amortization falling 78% to $1.27 billion. These reductions were driven by Alibaba's strategic expenditures on quick commerce initiatives, enhancing user experience, targeted acquisitions, and advancing technology development.
Breaking down revenue streams, the Chinese e-commerce segment recorded a 16% rise, reaching $18.62 billion. This growth was supported by accelerated onboarding of brands on the Tmall platform and heightened demand for quick-commerce services. Meanwhile, international commerce revenue grew by 10%, totaling $4.89 billion, attributable in part to AliExpress’s expansion into local inventory deployment.
The company’s Cloud Intelligence Group sustained impressive momentum, achieving a 34% increase in revenue to $5.59 billion, a trend driven by rising demand for public cloud services and the rapid adoption of AI technologies.
Market analysts have expressed confidence in Alibaba's future AI prospects. Notably, Nomura analyst Shi Jialong pointed to Alibaba’s advantageous position amid accelerating AI innovation in China’s technology sector, which could unlock a broader spectrum of AI applications and use cases benefiting the company.
Trading activity showed Alibaba shares gaining 0.93% during early premarket buying, reaching approximately $177.30, reflecting continued investor interest in the stock coinciding with these business developments.