On July 26, Alibaba Group issued an announcement: The board of directors has authorized the group management to submit an application to the Hong Kong Stock Exchange to add Hong Kong as the main listing place.

Zhang Yong, chairman and CEO of Alibaba Group, said that the purpose of this decision is to allow a wider range of investors, especially Alibaba's digital ecosystem players, to share Alibaba's growth and future.

　　After the Hong Kong Stock Exchange completes the review process, Alibaba will be dually listed on the main board of the Hong Kong Stock Exchange and the New York Stock Exchange.

　　After the implementation of the dual main listing, it is expected that international investors will allocate more Alibaba Hong Kong stocks, which may inject new liquidity into the Hong Kong stock market.

At the same time, Alibaba's Hong Kong stocks are expected to meet the qualifications for southbound trading, which may create more convenience for mainland investors to directly invest in Alibaba.

　　Analysts generally believe that for Alibaba and China concept stocks, dual main listing is the best business choice to comply with the current pattern and market expectations and ensure the interests of investors.

Ali's choice of Hong Kong is the general trend

　　Alibaba and Hong Kong have a long history.

Hong Kong is the starting point of Alibaba's journey from China to the world. Since 2007, Alibaba has made Hong Kong the first choice for its main listing.

　　In 2007, Alibaba's B2B business was listed on the Hong Kong Stock Exchange.

In 2014, when Alibaba planned an overall listing, the first destination it considered was the Hong Kong Stock Exchange, and relevant roadshows were carried out.

However, due to the restrictions of relevant regulations at that time, Ali finally transferred to the New York Stock Exchange to list.

　　In 2014, on the eve of its listing in the United States, Alibaba still publicly stated: In the future, conditions permitting, we will return to the domestic capital market and share the company's growth with domestic investors.

　　In 2018, the Hong Kong Stock Exchange launched the reform of the listing system, which also created more favorable conditions for a large number of domestic Internet companies, including Alibaba, to list in Hong Kong.

In November 2019, Alibaba was listed in Hong Kong for the second time, and New York is still the main listing place of Alibaba.

　　Since its listing in Hong Kong in 2019, most of Alibaba's outstanding shares have been transferred to Hong Kong for registration.

According to statistics, for the six months ended June 30, 2022, the average daily trading volume of Alibaba Group's shares in the Hong Kong market was approximately US$700 million, and the average daily trading volume in the US market was approximately US$3.2 billion.

China and the Asia-Pacific region are the main markets for Alibaba's business development, and Alibaba has always been highly concerned by Chinese and Asia-Pacific funds.

This time, Ali added Hong Kong as the main listing place, which is a matter of course at the technical level, which is also in line with the market’s expectations over the past period of time.

　　The choice of dual main listing in Hong Kong also reflects Alibaba's confidence in the future of Hong Kong and even the Chinese market.

When announcing relevant news, Zhang Yong emphasized that Ali has firm confidence in China's economy and future.

Diversification of listing places for Chinese concept stocks has become an important trend

　　After the reform of the listing system of the Hong Kong Stock Exchange in 2018, more and more Chinese technology companies choose to list in the United States and Hong Kong. Listing" mode.

　　In recent times, dual main listings are becoming the mainstream model for Chinese concept stocks to return to Hong Kong.

Up to now, 9 Chinese stock companies including Zhihu, Shell, Xiaopeng and Ideal have achieved dual main listings in the United States and Hong Kong.

Alibaba, as a high-quality leading company with a market value of over 2 trillion Hong Kong dollars, has a strong symbolic significance for its dual listing in Hong Kong.

　　After dual main listing, related companies can better cope with the uncertainty of the single market, so as to better cope with the challenges brought by changes in the external environment.

　　Analysts believe that Alibaba's choice of dual listing in Hong Kong will significantly increase the profitability, scientific research investment and other technical indicators of companies listed on the Hong Kong Stock Exchange.

For the Hong Kong Stock Exchange, more high-quality trading targets, including Alibaba, will also strengthen its appeal to the global market.

Hong Kong's status as an international financial center continues to consolidate

　　According to the "Global Financial Centers Index" (GFCI), Hong Kong is currently the third largest financial center in the world, ranking second only to New York and London, with huge development potential.

According to Bloomberg data, benefiting from the gradual improvement of connectivity mechanisms such as the Hong Kong Stock Connect, the average daily turnover of the Hong Kong stock market jumped to about US$25 billion in the 30 days ended February 16 this year, which has greatly surpassed the London Stock Exchange and is equivalent to the same period in the same period. 60% of the New York Stock Exchange.

　　It is understood that after Alibaba's dual main listing in Hong Kong and New York, the depositary shares listed in the United States and ordinary shares listed in Hong Kong can continue to be converted into each other, and investors can continue to choose to hold Alibaba shares in either form.

This will attract more international capital to transfer to Hong Kong.

　　Analysts believe that after the implementation of the dual main listing, the pricing of Chinese stocks in the US and Hong Kong stocks will be independent of each other, which is expected to enhance the pricing power of the Hong Kong securities market.

Increased liquidity and improved pricing power will help Hong Kong further consolidate and enhance its status as an international financial center.

　　It is worth noting that the choice of dual main listing by Chinese concept stocks does not affect their listing status in the United States.

For a long time, overseas funds have played a significant role in the development of Chinese technology companies. The listing of a number of Chinese stock companies such as Alibaba in the United States has also enhanced global capital's understanding of Chinese companies and the Chinese market.

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