Alibaba has been in the news lately. In March, they announced plans to restructure as a holding company consisting of six distinct businesses, each able to fundraise independently. Then, in June, the company appointed a new CEO and Chairman, among other leadership changes. We believe these significant developments at China’s storied internet company can benefit shareholders of the E-Commerce giant and represent a positive signal for China’s internet sector overall.

In this edition’s theme highlight, we analyze Alibaba’s recent restructuring, leadership changes, and the 12 to 18-month timeline for new IPOs.

China Internet Highlights:

• Retail sales increased +12.7% year-over-year in May, though sales growth was curtailed by a higher base in June to only 3.1%.¹
• Game approvals were on display again in the second quarter, and June’s approvals bring the year-to-date total to 500 compared to only 466 for all of 2022.
• The sum of the market capitalizations of KWEB’s holdings (31 companies) is now less than the market capitalizations of both Alphabet and Amazon. For Alphabet’s market cap, you could purchase all the companies in KWEB and still have $400 billion left over.²

China Internet Sector Earnings Report Contents:

• China Internet Recent Highlights
• Subsector Analysis
• Theme Highlight – Alibaba’s Restructuring & How it Benefits Shareholders
• KWEB Top 10 Holdings Earnings Update

1. Data from National Bureau of Statistics of China, FactSet as of 6/30/2023
2. Data from Bloomberg as of 6/30/2023