Alibaba’s Shares Soar as Ant Group Fine Brings Regulatory Clarity to Chinese Tech Industry

Alibaba’s Hong Kong-listed shares rose by 3% on Monday as investors hoped that the regulatory scrutiny surrounding its financial arm, Ant Group, would end.

Chinese regulators imposed a fine of 7.12 billion yuan ($985 million) on Ant Group, which could signal the conclusion of Beijing’s crackdown on domestic tech companies.

Ant Group’s initial public offering was halted in late 2020 due to listing requirement violations. In 2021, Alibaba faced a $2.8 billion antitrust fine, while Meituan, a food delivery giant, was fined 3.44 billion yuan for violating anti-monopoly regulations. In 2022, ride-hailing giant Didi was penalized 8.02 billion yuan for breaching data security regulations.

Chinese regulators stated on Friday that most of the issues related to the financial businesses of platform companies had been resolved, signaling a move towards “normalized supervision” of the domestic tech industry. However, analysts warned that while regulatory scrutiny might end, broader industry-wide regulations could still be stringent. Some experts predict that Alibaba and Ant Group’s future growth rates will be significantly restricted, with Ant Group potentially operating like a state-owned bank in China.

Despite the fine imposed on Ant Group, some analysts remain optimistic about Alibaba’s prospects. They calculate Ant Group’s worth to be $89 billion, with Alibaba’s stake valued at $29.4 billion, based on their 33% ownership in Ant Group. This valuation suggests upside potential compared to Bloomberg’s estimate of Ant Group’s worth, which ranged from $22 billion to $57 billion. These analysts argue that Ant Group should be valued more similarly to PayPal, as the regulatory overhang on Ant Group has ended.

Ant Group announced a share buyback on Saturday, valuing the company at $78.53 billion, according to state media CGTN. This valuation is significantly lower than the $315 billion when Ant Group attempted to go public in 2020.

Alibaba Long (Buy)
Enter At: 90.97
T.P_1: 94.14
T.P_2: 100.25
T.P_3: 105.38
T.P_4: 110.81
T.P_5: 116.07
T.P_6: 122.24
S.L: 73.62


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