Hong Kong-listed Alibaba Group Holding Limited (HK:9988) announced that its shareholders have approved its plan to upgrade its Hong Kong listing to primary status. This move is expected to help Alibaba lure more Chinese investors and boost investments from the domestic market. The company’s Hong Kong listing will get primary status on August 28. Alibaba shares gained 1.22% as of writing.
Alibaba is a Chinese technology company known for its online marketplace.
Alibaba Targets Growth with Primary Hong Kong Listing
Alibaba’s intention to make its Hong Kong listing primary was first conceptualized two years ago amid the growing tensions between the U.S. and China. The approval was expected as Alibaba’s shareholders have expressed concerns about the company’s growth prospects amid increasing competition and economic pressures.
The company is facing intense competition in the e-commerce sector from rivals like JD.com (HK:9618) and PDD Holdings (PDD), which operates discount platforms such as Pinduoduo and Temu. In 2023, Alibaba stock fell by over 30%. However, the stock rebounded in 2024 with an 11% year-to-date gain.
Additionally, the upgrade will enable Alibaba to participate in a program that connects the Shanghai and Shenzhen exchanges with Hong Kong’s market.
Alibaba Delivered Mixed June Quarter Results
Recently, Alibaba reported results for its June quarter that highlighted challenges in its e-commerce business, offset by growth in its Cloud unit. Revenue from Alibaba’s cloud segment rose 6% year-over-year to ¥26.5 billion, driven by artificial intelligence (AI) and public cloud growth. In contrast, e-commerce revenue from Taobao and Tmall Group fell 1% to ¥113.37 billion.
Overall revenue grew 4% year-over-year to ¥243.2 billion, while net income fell 27% to ¥24.02 billion.
Are Alibaba Shares a Good Buy?
On TipRanks, 9988 stock has received a Moderate Buy rating from analysts based on three Buy and two Hold recommendations. The Alibaba share price target is HK$99.10, which implies 21.4% upside potential on the current trading price.
