Alibaba Group Holding Ltd. shareholders have given the green light for the upgrade of its Hong Kong listing to primary status, slated for August 28, in a strategic move anticipated to draw substantial investments from mainland China.
This decision to convert the Hong Kong listing, proposed two years ago during escalating tensions with the US, was endorsed by shareholders to facilitate Alibaba’s participation in a program linking the Shanghai and Shenzhen stock exchanges with Hong Kong’s market. The stock saw minimal change in trading at the opening bell in Hong Kong on Friday.
While Alibaba’s move aims to galvanize investments, its shares have shown weaker performance compared to main rival Tencent Holdings Ltd. due to concerns surrounding competitive pressures and a sluggish consumer market in China.
The recent financial results demonstrated a mere 4% revenue increase for the online retailer, coupled with a decline in profit by 27%, dispelling expectations for a swift recovery.
On top of the lackluster performance, Alibaba’s shares in Hong Kong have only seen an 8% uptick this year, trailing behind Tencent and Meituan, which have each surged by approximately 30%.
The challenges of China’s tepid retail sales impact Alibaba’s core operations, while stiff competition in cloud services hampers the growth potential of a key revenue stream for the company.
