Lalamove set for public market plunge in Hong Kong

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In this week’s Opening Bell, we look at: - [The impending IPO of logistics marketplace Lalamove's parent company]( - Baidu's generative AI gaffe - Bukalapak’s financials for 2022 - Other newsy highlights, such as Alibaba’s biggest restructuring effort in its 24-year history --------------------------------------------------------------- Hello {NAME} Ecommerce has become such a normal part of our lives that we seldom pause to think about what happens between the time we click the buy button and a parcel shows up at our door. Lately, I’ve been learning more about logistics players such as NinjaVan and J&T Express. These third-party logistics providers - also known as 3PL - work with ecommerce platforms and brands to ensure your parcel reaches you as seamlessly as possible. It isn’t as easy as it looks: Infrastructure in Southeast Asia, especially outside of the big cities, is still underdeveloped. Delivering a package to a village in Indonesia may even require several different modes of transport - from motorcycles to ferries! In this week’s big story, I analyze the draft prospectus of Lalatech Holdings, the parent firm of logistics marketplace Lalamove, which is preparing for an IPO in Hong Kong. Lalamove is present in all major Southeast Asian markets, where it currently focuses on the two-wheeler segment, ideal for serving individual consumers with small goods to ship. However, the larger prize is intra-city road freight, and Lalamove will have to offer more four-wheel options to serve this market effectively. Lalamove’s listing will be a test case of investor demand for other logistics IPOs in the short to medium term. -- Simon  ---------------------------------------------------------------  THE BIG STORY [5 key takeaways from Lalamove’s draft prospectus to list in HK]( Lalatech Holdings is out to woo investors with its global presence, scalable business model, and cutting-edge tech. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Breaking up never looked so good: Chinese tech giant Alibaba Group (BABA, NYSE) announced it was [splitting into six business units]( - and most of them could each pursue independent IPOs. Investors approved of the move, sending the ecommerce giant’s New York-listed shares up 14%. Previously, the ecommerce behemoth split its financial services business into a separate unit that became behemoth Ant Financial. The latter’s 2020 listing was famously thwarted by the Chinese government after Alibaba founder Jack Ma made a speech perceived to be critical of regulators. However, Ant was spun off before Alibaba itself was listed. If these independent IPOs go ahead, investors will be able to choose which of Alibaba’s individual businesses they wish to own. For example, they may choose to put their money in logistics arm Cainiao but not Alibaba’s digital media and entertainment group. Southeast Asian ecommerce player Lazada, which Alibaba owns, could also benefit from this move, since it is likely to fall under the separate Global Digital Commerce Group and may attract a fresh infusion of new capital. If this move pays off for Alibaba, other tech conglomerates - including those in Southeast Asia - may be tempted to follow suit. 2️⃣ Southeast Asia to get VIP treatment: Vipshop (VIPS, NYSE), the Chinese ecommerce firm, [officially launched in Singapore]( its headquarters for Southeast Asia. The company rolled out its services last December. Its head in the region is Bernard Tay, who was previously the country leader for Amazon’s Singapore marketplace and head of Amazon Global Selling Southeast Asia. Vipshop, with a market value of around US$9 billion, is much smaller than some of its Chinese counterparts like Alibaba (US$265 billion) and Pinduoduo (PDD, NDAQ) (US$92 billion). Its launch in the region is yet another sign of things to come. With geopolitical rivalry between the United States and China escalating, Southeast Asia is seen as a neutral ground where both sides can coexist and continue to do business. Local players like Sea’s (SE, NYSE) Shopee and GoTo’s (GOTO, IDX) Tokopedia will continue to face competition from old players and new entrants alike and cannot rest on their laurels. However, the third-party logistics players that serve them will certainly welcome a new source of orders. 3️⃣ Baidu eschews publicity for AI service: While many tech giants have been going all out to promote their AI capabilities, Chinese search engine Baidu (9888, HKG) canceled a press event for its Baidu Intelligent Cloud, which was supposed to reveal a service related to Ernie, its competitor to ChatGPT. Instead, the internet giant said it was holding closed-door meetings with potential enterprise customers. This may have something to do with the initial reaction to Ernie’s first unveiling, which left viewers disappointed as the service was only shown on a pre-recorded video and not a live one. Perhaps Baidu, leading the charge for AI products and services in China, would prefer to say less and exceed expectations going forward. Tech companies are rushing to join the AI bandwagon, even as some of the industry’s biggest names have [signed a letter]( calling for a pause in training the most powerful AI systems for six months, citing “profound risks to society and humanity.” However, unless governments worldwide decide to take action in a coordinated manner - which we strongly doubt will happen - these calls are likely to remain unanswered. The stakes appear so high that no party will be willing to push the pause button without the assurance that they wouldn’t be handing victory to competitors who choose to push ahead.  2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [US$130.8 million]( The net profit Indonesian ecommerce major Bukalapak (BUKA, IDX) reported for 2022. However, this was mainly due to a [marked-to-market]( gain from its investment in Allo Bank (BBHI, IDX) - the company is still overall in the red on an adjusted EBITDA basis. - [US$110 billion]( The value of assets North Carolina’s First Citizens Bank (FCNCA, NDAQ) will assume from its purchase of Silicon Valley Bank from the US Federal Deposit Insurance Corporation. THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. The return of Ermotti: In a surprise announcement, UBS (UBSG, SWX) announced that its former CEO Sergio Ermotti would [return]( to the Swiss banking giant to lead the takeover of Credit Suisse - an acquisition foisted on UBS by Swiss regulators. Ermotti was CEO of UBS from 2011 to 2020 and led the bank through the challenges that followed the global financial crisis. He was seen as being a more experienced hand than successor Ralph Hamers, who supposedly lacks M&A, investment banking, and wealth management expertise. Ermotti’s return marks the latest in a string of public companies that have replaced underperforming CEOs with their larger-than-life predecessors - Walt Disney (DIS, NYSE) brought back Bob Iger, while Starbucks (SBUX, NDAQ) brought back Howard Schultz - who has since handed over the reins to Laxman Narasimhan. That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. 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