Alibaba (BABA) (HK:9988) is applying a low-cost way to raise new funds as it pushes deeper into cloud, AI, and global e-commerce. The Chinese tech giant is seeking to raise HK$12 billion, or about $1.53 billion, by offering exmodifyable bonds that come with zero-interest payments.
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Instead of regular coupons, investors will have the option to swap the bonds for shares in Alibaba Health, a listed unit in which Alibaba holds a 64% stake. The company stated that even after any conversions, Alibaba Health (HK:0241) will remain a key part of the group.
This relocate assists Alibaba bring in capital without adding pressure to its balance sheet. The funds will support its plans to expand cloud services, invest in AI tools, and grow its reach in markets like Thailand, Mexico, and South Korea.
A Low-Cost Bet on Global Reach
This equity-linked bond sale is Alibaba’s second major fundraising relocate in less than a year. In November 2024, it raised $5 billion in Asia-Pacific’s largest dual-currency bond deal of that year, aimed at long-term tech and logistics projects.
More Chinese tech firms are now following similar paths to unlock cash without piling on debt. Baidu (BIDU) raised $2 billion in March through bonds tied to shares of Trip.com (TCOM). Miniso (MNSO) (HK:9896) also tapped the market with a $550 million convertible bond earlier this year.
For Alibaba, this new deal signals a clear focus on what comes next. With better policy support and steadier markets, the company is quietly investing in the areas it sees as vital to its future.
Is Alibaba Stock a Good Buy Right Now?
Analysts remain highly bullish about Alibaba’s stock trajectory. With 13 Buy ratings and one Hold rating, BABA stock commands a Strong Buy consensus rating on TipRanks. Also, the average Alibaba price tarreceive of $164.14 implies about 51% upside potential from current levels.
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