On August 28th, Alibaba Group announced that it has officially completed its dual primary listing in Hong Kong, becoming a company listed on both the Hong Kong Stock Exchange and the New York Stock Exchange. The company's ordinary shares listed on the Hong Kong Stock Exchange and American Depositary Shares listed on the New York Stock Exchange are continuously convertible.
In July 2022, Alibaba announced that the board of directors had authorized the group's management to submit an application to the Hong Kong Stock Exchange to add Hong Kong as the main listing location. According to the expectation at that time, the relevant process would be completed by the end of 2022. But two months later, a new employee stock ownership plan will need to be developed, and the plan to complete the dual major listing by the end of 2022 will be postponed.
Until May 14, 2024, Alibaba stated in its fiscal year 2024 performance report that it had been preparing for a major listing in Hong Kong and expected to complete the conversion by the end of August 2024.
On August 23rd, Alibaba Group announced that it will add Hong Kong as its main listing location and will primarily list on the main board of the Hong Kong Stock Exchange on August 28th, becoming a company with dual main listings on the Hong Kong Stock Exchange and the New York Stock Exchange. Now, the dual major listings have been successfully completed.
CICC believes that considering Alibaba has already met other requirements for inclusion in the Hong Kong Stock Connect, if the company successfully completes the "dual major listing" conversion by the end of August 2024, it is expected to catch up with the Hong Kong Stock Connect inspection day on September 5th and be included on September 9th.
Analysts generally believe that if Alibaba can be included in the Hong Kong Stock Connect, it will further expand the investor base from mainland China and other parts of Asia, which means more liquidity for Alibaba and greater flexibility for investors to hold and trade Alibaba shares in the public market. It will also have a positive impact on Alibaba's long-term performance and valuation prospects.
Morgan Stanley stated in its report that if included in the "Hong Kong Stock Connect", Alibaba's southbound capital holdings may remain stable at over 10% in the long run, and are expected to provide significant incremental support for the company's value.
Goldman Sachs stated in its report that it expects Alibaba to be included in the Hong Kong stock market in early September after completing its main listing, which could bring potential net inflows of $15 to $16 billion, maintaining Alibaba's "buy" rating and a target price of HKD 105.