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Loaded Alibaba and Jack Ma to continue investment

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Alibaba and its founder Jack Ma are set to continue their investment spree, said analysts, as the Internet behemoth revealed its "well-loaded" cash position in its first quarterly report as a publicly listed company on Tuesday.

Employees work at an Alibaba Group warehouse on the outskirts of Hangzhou, Zhejiang province Oct 30, 2014. [Photo / Agencies]

Alibaba held a total of 109.9 billion yuan ($17.97 billion) cash, cash equivalents and short-term investments at the end of September after its initial public offering, up from 43.6 billion yuan six months earlier, said the report.

"Alibaba will remain active in mergers and acquisitions with the target to add new users, expand its products and services, and link up with international market," said Cao Junbo, chief analyst at iResearch Consulting Group, on Wednesday.

The ecommerce company and its founder Jack Ma have invested aggressively over the past one year and a half in areas including media, social network, online-to-offline and location-based services, financials, logistics, entertainment, healthcare and consumer products.

Investment in Weibo, China's version of Twitter, and video websites can add traffic to Alibaba, while acquisitions in medicine- and motor-related companies and service sector enable the company to diversify its offers, said Cao Junbo to chinadaily.com.cn.

"The fundamental strength of our business gives us the confidence to invest in new initiatives," said Alibaba's chief financial officer Maggie Wu in the report, announcing the company's revenue surged 54 percent to $2.74 billion in the quarter ended in September.

"We already saw synergy in its recent mergers and acquisitions, and cross-industry integrations cradle huge innovation potentials," said Cao.

However, compared with Tencent and Baidu, Alibaba is still relatively weak in segments including travel, gaming, mobile app distribution and certain mobile vertical segments, said Alicia Yap, head of China internet research at Barclays, to South China Morning Post.

As 2014 is on course to be a year filled with shopping spree for Alibaba and Jack Ma, let's take a look at the major sectors that have attracted their money.

Media and entertainment:

Hollywood content may be the latest to Alibaba's shopping list, as Jack Ma paid his visit last week, seeking US films and TV series for Youku Tudou, China's most popular video-streaming website, of which the Internet behemoth owns about 17 percent stake.

Alibaba has already signed agreements to be able to stream content such as The Hunger Games since July, according to Bloomberg.

Earlier this year, Alibaba acquired a majority stake in Hong Kong-based ChinaVision Group for $804 million. The company, now named Alibaba Pictures Group, produces Chinese-language TV shows and movies.

Wasu Media decided in April to sell its 20 percent stake for 6.54 billion yuan to Hangzhou Yunxi Investment Partnership Enterprise, which is owned by Jack Ma and other partners.

The Shenzhen-listed media company announced a cooperation agreement with Alibaba at the same time for online content and Internet TV.

Jack Ma's personal investment portfolio also includes about 4.13 percent stake of Huayi Brothers Media, according to GF Securities.

Sports and healthcare

"Soccer is a very charming sport. Investing in the industry is more like investing in happiness. It is a rational approach," said Jack Ma at a press conference in June when Alibaba Group announced to pay up to 1.2 billion yuan for a 50 percent share of Guangzhou Evergrande Football Club, China's first-ever winner of the Asian Football Confederation Champions League.

Ma added that the investment is in line with the company's strategy which is to pursue health and happiness.

Alibaba Group and Yunfeng Capital, a private equity firm co-founded by Jack Ma, invested about $171 million to gain control of healthcare data company CITIC 21CN in January.

The Hong Kong-listed company is engaged software development for drug authentication.

Internet and technology

Alibaba announced in July that it had completed the acquisition of AutoNavi Holdings Ltd after a proposal months earlier to take full control of the US-listed digital mapping company.

In May last year, Alibaba acquired 28 percent of AutoNavi's shares for $294 million. Its all-cash offer in February proposed to acquire the remaining 72 percent at $21 per American depositary share, which values AutoNavi at approximately $1.58 billion.

The deal was followed by Alibaba's announcement in June of buying remaining shares of mobile browser firm UCWeb in the biggest merger of Chinese Internet history.

In a drive for strategic expansion on mobile, the ecommerce giant previously acquired 18 percent shares of microblog platform Sina Weibo for $586 million, and undisclosed stake in Chinese online travel site Qyer.com and cloud-storage service platform Kanbox in 2013.

Consumer staples:

Yunfeng Capital and CTIC Private Equity bought a combined 60 percent stake in Chinese dairy giant Inner Mongolia Yili Industrial Group.

The shares bought in the unit are worth at least 2 billion yuan.

The ecommerce behemoth also tapped its investments into offline shopping, as Alibaba announced it had invested about 4.26 billion yuan in Intime Retail Company Limited, one of China's leading department store operators, said its latest quarterly report.

Financials:

Jack Ma's Yunxi Investment decided to buy a stake of more than 20 percent in China's financial software developer Hundsun Technologies in April. But it's only months after that Alibaba officially launched its financial arm.

Alibaba's Ant Small & Micro Financial Services Group Co, established on Oct 16, has six entities: Alipay, China's Paypal-like third-party payment platform; Alipay Wallet, the mobile application of Alipay; Yu'e Bao, a money market fund with 570 billion yuan ($93 billion) under management as of June 30; Zhaocaibao, a third-party financial services platform; Ant Micro, a micro-loan provider; and MYBank, a private bank.

The newly approved private bank, based in Hangzhou, has registered capital of 4 billion yuan, with Zhejiang Ant Small and Micro Financial Services Group of Alibaba holding 30 percent of its shares.

In a written statement sent to China Daily, MYbank said it will use the Internet as its major means of operation and will provide financial services and products with relatively simple structures to micro and small enterprises as well as individual customers on e-commerce platforms.

Logistics:

Alibaba has invested about 1.55 billion yuan in Singapore Post Limited, the national postal provider in Singapore and logistics solution provider in Asia-Pacific, according to its latest quarterly report.

The ecommerce giant earlier last year announced to establish a 100 billion yuan logistics network that aims to make 24-hour domestic deliveries possible with industry partners.

Ma said the move would be consistent with Alibaba's long-term vision to make logistics less of a bottleneck for the fast-growing e-commerce industry.

The project, China Smart Logistic Network, is expected to be completed in four to seven years.

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