Hua Er Jie Jian Wen·2025-09-11 01:15Core Viewpoint - Alibaba is raising approximately $3.2 billion through a zero-coupon convertible senior note issuance to strengthen its cloud business and international expansion strategy, amidst increasing competition in the local services market [1][2]. Group 1: Financing Details - The note will mature on September 15, 2032, and is classified as unsecured senior debt [1]. - Approximately 80% of the raised funds will be allocated to enhancing cloud infrastructure, including data center expansion, technology upgrades, and service optimization [1][2]. - The remaining 20% will support the expansion of international business through strategic investments to solidify its global market position and improve operational efficiency [1]. Group 2: Strategic Context - The timing of the financing coincides with Alibaba's aggressive entry into the local services market, as evidenced by a significant subsidy of over 1.1 billion yuan through its Gaode Map platform [1][4]. - This move is interpreted as a direct challenge to competitors like Meituan and Douyin, aiming to capture market share in local services [4][5]. - The financing aligns with Alibaba's long-term strategy to position "AI + Cloud" as a second growth curve, with a focus on maintaining its competitive edge in the cloud market [2][5]. Group 3: Previous Financing Activities - Earlier in July, Alibaba issued approximately 12 billion Hong Kong dollars in zero-coupon convertible bonds for similar objectives related to cloud infrastructure and international e-commerce support [2]. - Last year, Alibaba set a record by issuing $5 billion in convertible bonds, marking the highest issuance amount for Asian companies in USD-denominated bonds at that time [3].