Alibaba investors collect US$39.6 billion in stock’s best rally since January as antitrust penalty removes gloom

Name: China kicks off antitrust probes into Alibaba over alleged monopolistic practices
Uploaded: 2021-04-12T09:43:18.000Z
Duration: 1 min 26 s
Description: China kicks off antitrust probes into Alibaba over alleged monopolistic practices

Shares of Chinese e-commerce leader rose 6.5 per cent in Hong Kong, adding US$39.6 billion to its market capitalisation

Before Monday, stock had lost US$230 billion in value since November 3 when authorities abruptly suspended Ant Group IPO in a warning shot to industry

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An employee exits the Alibaba Group Holding Ltd. headquarters in Hangzhou in January 2021. Photo: Bloomberg

Martin Choi

Published: 5:43pm, 12 Apr 2021Updated: 5:43pm, 12 Apr 2021

Alibaba Group Holding surged by the most in nearly three months, adding HK$308 billion (US$39.6 billion) back to its market value, after a record penalty for antitrust practices helped remove a major weight on its stock performance since November.

The 18.2 billion yuan (US$2.8 billion) fine over the weekend, a culmination of a months-long probe, lifted a significant overhang on the company’s business and share price, analysts at Nomura, Citigroup and S&P Global Ratings said in reports published after the decision.

Alibaba, the owner of this newspaper, gained HK$14.20 or 6.5 per cent to HK$232.20 at the close of trading on Monday. The stock, which carries the fifth-largest weight of 5.2 per cent in the Hang Seng Index according to Bloomberg data, marked its best one-day advance since an 8.5 per cent rally on January 20.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

The latest development “could help lift the overhang that has weighed on share price performance the last few months,” Citigroup analysts led by Alicia Yap wrote in a note to clients, maintaining its buy call and price target of HK$328. Waiving its right to appeal suggests Alibaba wanted to “move forward to rebuilding business operation,” they said.

“We remain confident that Alibaba would navigate through the challenges and emerge stronger with more advanced technological innovation.”

Before today, the Hangzhou-based company in eastern Zhejiang province has lost HK$1.77 trillion (US$228 billion) of value since November 3 when Chinese authorities decided to clamp down on Alibaba and the tech sector by abruptly pulling the record-breaking dual stock offering of Ant Group in Shanghai and Hong Kong.

Alibaba “accepts the penalty with sincerity and will ensure its compliance with determination,” the company said in response to the penalty. “To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”