Alibaba seeks dual-primary listing in Hong Kong

HONG KONG

E-commerce giant Alibaba said yesterday it will seek a primary listing in Hong Kong, potentially giving access to China’s vast pool of investors, as mainland officials indicate a long-running crackdown on the tech sector could be coming to an end.    

The move also comes as Chinese tech companies traded in New York grow increasingly worried about a regulatory drive by U.S. authorities amid simmering tensions between the superpowers.    

While Alibaba has a secondary listing in Hong Kong, that does not allow it to join a popular Stock Connect programme that links to bourses in Shanghai and Shenzhen.    

The primary listing, which is expected to take place before the end of the year, would open that door.    

The Hangzhou-based group is one of a number of tech behemoths ensnared in a wide-ranging regulatory crackdown on alleged anti-competitive practices since late 2020.  

The campaign has been driven by fears in Beijing that massive internet companies control too much data and have expanded too quickly.    

But officials appear to be taking a lighter touch as they grapple with a slowing economy. And in May, Premier Li Keqiang urged support for tech companies to list both domestically and abroad.    

But there is still a strict regulatory environment: President Xi Jinping last month called for stronger oversight and better security in the financial tech arena.    

CEO and group chairman Daniel Zhang said on Tuesday the primary listing aimed to foster “a wider and more diversified investor base to share in Alibaba’s growth and future, especially from China and other markets in Asia”.    

“Hong Kong is also the launch pad for Alibaba’s globalisation strategy, and we are fully confident in China’s economy and future.”    

Alibaba said yesterday it had an average daily trading volume of $3.2 billion in the United States in the first six months of the year, while its Hong Kong secondary listing saw around $700 million.      

Beijing has opposed an attempt by U.S. regulators to inspect the audit papers of Chinese firms listed there, and Alibaba is among 250 companies that face potential removal if no deal is reached.    

Domestically, Alibaba is still reeling from the tech crackdown as well as China’s slowing economy caused by the fallout from strict Covid curbs.    

The company was hit with a record $2.75 billion fine for alleged unfair practices last year, and a planned 2020 IPO by Alibaba’s financial arm Ant Group - which would have been the world’s largest public offering at the time - was cancelled at the last minute.    

Alibaba has lost around two-thirds of its value since a 2020 peak and in May the firm reported that profit fell 59 percent in the last fiscal year.