Alibaba's film, television and pharmaceutical business: Buying shells at low prices and acquiring assets at high prices

In recent times, Alibaba has been adept at playing in the capital market, with its controlled listed companies Alibaba Pictures and Alibaba Health making frequent moves.

Just yesterday, Alibaba announced that it had reached an agreement with Ali Health to transfer the operating rights of Tmall's online medical business to Ali Health in exchange for newly issued shares and convertible bonds of Ali Health.

Alibaba currently owns about 38% of Ali Health’s equity. After the transaction is completed, its shareholding will increase to about 53% (if the convertible bonds are fully exchanged, it will increase to about 54.6%). Ali Health will become a subsidiary of Alibaba Group .

After the transaction is completed, consumers will be able to continue to purchase related products online on Tmall. Ali Health will be responsible for operating the merchant in the background and centralizing product supply to provide consumers with high quality and a wide range of choices.

Ali Health also shoulders the mission of integrating Alibaba's online medical resources. In the future, it will be able to better focus on the strategy of medical and health e-commerce and expand its services to more participants in China's medical and health industry.

This decision stimulated a sharp rise in Ali Health's share price yesterday, with the highest increase of 96% and closing up 81% at HK$12.26, making it the stock with the largest increase, with 300 million shares traded and a turnover of HK$3.651 billion. Although Ali Health's share price fell back today, it is still at a high level.

Just a week ago, Alibaba Pictures also announced that it had received an asset injection proposal from Alibaba. The possible injection transaction will include Alibaba Group’s online movie ticketing business and a platform for financing the production of movies and other media content.

According to the general understanding of the industry, the entities carrying the above businesses are Taobao movie ticket business and Yulebao business platform. This is the first time that Alibaba has injected assets into Alibaba Pictures. After Alibaba Pictures resumed trading, the stock price rose 36% to HK$3.89 on the same day.

Due to the dual halo of "asset injection" and " Jack Ma concept stock", the share price of Alibaba Pictures rose by nearly 50% in two days during that period. Even Zhao Wei and her husband, who held a huge amount of shares in the company, made nearly 3 billion Hong Kong dollars (about 2.4 billion yuan) in two days.

Back in March 2014, Alibaba Group made an important investment decision: to acquire Hong Kong-listed China Culture Media Group for HK$6.244 billion, subscribing to 60% of the company's enlarged issued share capital.

Five months later, after the transaction was completed, China Culture Media Group was officially renamed Alibaba Pictures. At the same time, Zhang Qiang, former vice president of China Film Group, was officially appointed as CEO of Alibaba Pictures in August. Alibaba Pictures then officially entered the Alibaba ecosystem.

Also in January 2014, Alibaba teamed up with Yunfeng Capital to invest 1.3 billion to acquire CITIC 21st Century. The share price of this shell stock soared nearly 4 times in one day, and its market value rose to more than 30 billion yuan. Alibaba's own investment also increased by 13 times, making a profit of nearly 16 billion yuan in one day.

At the beginning, many people were not optimistic about Alibaba's investments in China Culture and CITIC 21st Century. They just thought that Alibaba needed more concepts before going public, so it spent a lot of money to buy a lot of shell resources, and its actions were more like crazy behavior.

Now Alibaba is obviously making a lot of money. With Alibaba's listing, Jack Ma is at the peak of his career in China. After Alibaba injected these shell resources into its assets, it not only opened up the film and television industry and the pharmaceutical industry, but also these shell resources quickly appreciated in value in just one year.

An industry insider couldn't help but sigh that CITIC 21st Century originally allocated 5.2 billion shares (63.4% of the shares) at a price of HK$0.3 before the transaction, but now it is buying Alibaba Group's assets at a price of HK$5.28 per share. What a shrewd businessman Jack Ma is.

Another fund industry insider pointed out that Tencent is an inevitable rival in Alibaba's development path. Tencent accounts for 60% of users' online time. Alibaba must accelerate the integration of second-tier Internet resources within a limited time to seize more traffic investment advantages.

The above-mentioned person told Tencent Technology that Alibaba has advantages over other companies in terms of structure and pattern. Alibaba will have frequent asset mergers and acquisitions this year, and even Alibaba Pictures may be renamed "Ali Interactive Entertainment" again.

Alibaba Pictures has stated that its business scope will not be limited to content production, but will also build an industrial chain in content innovation, investment, production and distribution, as well as commercial development areas such as derivatives, to create a complete business ecosystem.

Alibaba CEO Lu Zhaoxi also said that in Alibaba's future strategy, happiness, health and internationalization will be the three major directions. However, Alibaba did not make any official statement on the various opinions from the outside world, only pointing out that Alibaba has always wanted to do business in the film and television and health fields.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.