(Yicai Global) Feb. 7 -- Shares of Alibaba Health Information Technology jumped after Alibaba's medical arm said it would acquire the offshore holding vehicle of sister firm Ali JK Nutritional Products for HKD8.07 billion (USD1 billion) to consolidate its position as the group's flagship healthcare platform.
AliHealth's stock price [HKG:0241] closed almost 4 percent higher today at HKD12.06 (USD1.55), after earlier increasing as much as 5.7 percent. The benchmark Hang Seng Index lost 0.3 percent. The shares have gained 36 percent in value since the start of this year.
Alibaba Health Information Technology will issue 860 million consideration shares to Ali JK at HKD9.38 each (USD1.20) for its Ali JK ZNS unit, Hangzhou-based AliHealth announced through the Hong Kong Stock Exchange yesterday.
The move will strengthen AliHealth's market leadership in the online healthcare community, complement its four business segments of pharmaceutical e-commerce, internet healthcare, intelligent healthcare and product traceability, as well as achieve more stable and sustainable growth, the firm said.
British Virgin Island-registered Ali JK ZNS supplies over 500 vendors on Alibaba's online business-to-consumer marketplace Tmall with pharmaceuticals, medical instruments, formula food, health products and services. The firm reported CNY9.6 billion (USD1.4 billion) in sales in the fiscal year to March 2019 and had 35.8 million active buyers.
AliHealth-affiliated Tmall pharmacies generated over CNY37 billion (USD5.3 billion) in sales between last April and September. They had 160 million active users in the 12 months to the end of September 2019.
The firm's business revenue more than doubled in the first half of last year to CNY4.1 billion (USD587 million). Operating profit came in at CNY29.39 million, a significant improvement from a loss of CNY705.84 million (USD101 million) in the same period of 2018.
Editors: Zhang Yushuo, Kim Taylor