Alibaba’s dual-primary listing to bring inflows from mainland; keeps Buy rating – Goldman Sachs
Alibaba’s dual-primary listing to bring inflows from mainland; keeps Buy rating – Goldman Sachs

Alibaba’s dual-primary listing to bring inflows from mainland; keeps Buy rating – Goldman Sachs

 

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Goldman Sachs said in a note on Wednesday that, if Alibaba Group’s application for a primary listing in Hong Kong is approved by the Hong Kong Stock Exchange, it will potentially make the company eligible for the Mainland – Hong Kong Stock Connect Scheme and may bring southbound capital inflows to Alibaba’s Hong Kong stocks.

Alibaba said Tuesday that it would apply for a primary listing in Hong Kong and expects the listing to be completed by the end of 2022, making it a dual primary listed company on the Hong Kong Stock Exchange and the New York Stock Exchange.

The dual-prime listing status will also ease investors’ concerns over delisting risks of Alibaba’s ADRs, further improving the stock’s liquidity and expand its shareholder base, the bank said.

Alibaba is scheduled to release financial results for the first fiscal quarter ended June 30 next week. Goldman Sachs expects its Q1 revenue to be unchanged from a year earlier, with customer management revenue (CMR) business revenue to slide by 9%. It expects Alibaba’s adjusted EBITA to slid 34% from a year earlier to 27.5 billion yuan, with adjusted EBITA for Chinese e-commerce business to decline 20% to 40.5 billion yuan.

The bank maintains a Buy rating for Alibaba, with target price kept unchanged at HK$163.