Shareholders of Chinese e-commerce giant Alibaba have approved a plan to upgrade its Hong Kong listing to primary status, the company said, move that is expected to attract huge investments from mainland China.
The Jack Ma-founded firm had originally proposed the idea a couple of years ago at a time when there was heightened geopolitical tensions between China and the U.S.
The listing status upgrade allows Alibaba to be part of a program which would connect the respective bourses in Shenzhen and Shanghai to the Hong Kong stock exchange.
The decision was expected to be approved by the company's investors who have long been concerned over the firm's growth prospects as it faces new market rivals such as PDD Holdings.
The conversion to dual primary listing does not involve any issue of new shares or even raising of funds by the company, Alibaba said.
Hong Kong-listed shares of the company gained as much as 0.7% to HK$82.2 in early trade.
E-Commerce Sales
Alibaba Group Holding missed market expectations for first-quarter revenue earlier this week, as the company's domestic e-commerce sales came under pressure from cautious spending by Chinese consumers in a faltering economy.
A halting economic recovery in China coupled with a persistently weak property market and high job insecurity levels have sapped consumer confidence and spending power in the world's No. 2 economy, hitting global firms across the board.
Alibaba reported revenue of 243.24 billion yuan ($33.98 billion) for the quarter ended June 30, compared with analysts' average estimate of 249.05 billion yuan, according to LSEG data.
Revenue at the firm's domestic e-commerce arm fell 1% even as the number of purchasers and their purchase frequency increased order growth by double digits.
Chinese e-commerce giants have had to resort to heavy discounting and promotions to attract shoppers, pressuring margins across the retail sector.
'Spending Slump'
"The spending slump in China is real. Consumers are spending less, downgrading purchases and becoming more rational," said M Science analyst Vinci Zhang. "So going into the second half of the year, Alibaba and JD.com will likely continue to face challenges."
Sales at China's blowout mid-year e-commerce sales festival in June fell for the first time ever according to third party estimates, despite major online platforms' efforts to dole out offers for an extended period.
Additional reporting by ESM
