Alibaba has joined Chinese local government and corporate backers to bail out the country’s biggest bricks-and-mortar retailer. Shares in Suning rose 10 per cent before hitting a daily limit. But it is too early to declare a turning point.

Investors led by the Nanjing state asset management committee and Jiangsu provincial government will take a 17 per cent stake in Suning in exchange for a $1.4bn investment. Chinese appliance and electronics makers Xiaomi, Midea, Haier and TCL Technology are among the backers.

Theoretically, Suning’s plans to expand delivery services from its retail stores and Alibaba, its second-largest shareholder, should help to boost sales in the future.

But Suning needs cash now. The $1.4bn investment is not enough to cover short-term obligations. About $7bn is due within a year.

Suning’s weakness is its dependency on physical retail store sales. It operates more than 8,800 stores, most of which are in China. Expansion has been focused on other physical store chains, including the acquisition of French retailer Carrefour’s Chinese stores and the department store arm of Dalian Wanda Group.

More worrying is the leadership vacuum created by the bailout. Founder Zhang Jindong will no longer be a controlling shareholder after the 17 per cent stake that he and related associates hold is transferred to a state fund. That could impede quick decision-making, especially around asset sales. These are needed if the group is to stay afloat.

Of the assets Suning has to sell, Italian football club Inter Milan should be the first to go. The club is valued at up to €900m and faces financial difficulties of its own. It is a pricey hobby — lost ticket sales amid the pandemic and hundreds of millions of euros needed to recruit top players are a drain. It adds little value to the group’s core business.

Suning’s low valuation may look appealing. Its enterprise value to forward sales ratio stands at just 0.3 times, even after Tuesday’s gains. But until Inter Milan has been sold, the group’s prospects remain ambiguous.