Alibaba's Hong Kong shares surge 16% on split-up plans | Inquirer Business

Alibaba’s Hong Kong shares surge 16% on split-up plans

/ 10:35 AM March 29, 2023

Logo of Alibaba group

A man walks past a logo of Alibaba Group at its office building in Beijing, China Aug 9, 2021. REUTERS/Tingshu Wang/File photo

Hong Kong shares of Alibaba Group soared on Wednesday, marking a vote of confidence from investors after the company announced a major restructuring plan.

The stock jumped as much as 16.3 percent to HK$98, its highest since Feb 21, on course to snapping three consecutive sessions of losses and tracking a 14.3 percent rally in its U.S.-listed shares overnight.

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The restructure, which was announced on Tuesday, has helped boost investor confidence in the wider Chinese tech sector, which has been battered by a heavy regulatory crackdown in recent years.

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Shares of Alibaba’s e-commerce rival JD.com Inc were up 7 percent, and gaming giant Tencent Holdings Ltd jumped 5 percent on Wednesday morning.

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That compared with a 2.3- percent jump in benchmark Hang Seng Index and a 3.2- percent gain for the Hang Seng Tech Index.

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In Japan, Softbank Group Corp, a major shareholder in Alibaba, shot up 6 percent.

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Alibaba said on Tuesday it would re-organize into a holding company structure, with Daniel Zhang retaining his position as group CEO, and six sub-divisions each with their own CEOs and boards.

The revamp is the most significant restructuring in the company’s history and comes after Beijing launched a years-long regulatory crackdown on the tech sector, in which Alibaba was a common target.

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One day before the re-organization was announced, Alibaba founder Jack Ma, who had been out of mainland China since late 2021, was spotted visiting a primary school in Hangzhou, the city where Alibaba is headquartered.

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TAGS: Alibaba, Hong Kong, Restructuring, shares

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