Alibaba is seeking a primary listing in Hong Kong as the e-commerce firm attempts to lure in more mainland Chinese investors and reportedly scales back its global ambitions.
In a statement released this morning, Alibaba, which already has a primary listing in New York, said the board had approved an application to upgrade its Hong Kong stock to a primary one.
The firm has had a secondary listing in Hong Kong since 2019, but a primary position would mean that Alibaba would be included in the Shenzhen-Hong Kong Stock Connect programme.
The move would also allow mainland investors greater access to the stock. For instance, electric vehicle car maker Xpeng has a dual listing in Hong Kong and in the US.
While the tech company said it would maintain activity Stateside, the move comes as dozens of Chinese firms face exodus from Wall Street, with Washington and Beijing continuing their battle over regulatory hurdles to review financial audits.
Alibaba chief executive Daniel Zhang said the move would bring “a wider and more diversified investor base to share in Alibaba’s growth and future, especially from China and other markets in Asia”.
The news comes after the Financial Times reported that the Hangzhou-based company was scaling back its global expansion plans.
Alibaba had looked to rival Seattle-based titan Amazon by bringing US businesses onto the platform.
The FT reported that Alibaba has missed its initial targets set out three years ago of signing up more than one million local firms.
One employee told the paper: “US manufacturers aren’t as competitive, the cost of everything is a lot higher including labour. The team don’t have enough support internally, so they can’t get enough suppliers and sellers on board.”
Shares in the Hong-Kong listed stock climbed over six per cent following the news of the move today. The stock has fallen nearly ten per cent in the year to date.
The listing process is expected to complete by the end of 2022.