Investors cheered a major revamp of Alibaba as a sign Beijing's crackdown on the corporate sector was nearing an end, sending shares of the Jack Ma-founded company and its peers soaring
Many investors have seen a wave of regulatory blitzes over the last couple of years that have hit its internet, private education and property sectors hard as a major cloud hanging over China's private sector.
"There was a consensus within and outside Alibaba that the stock was trading at a major discount to the inherent value of the businesses," said one of the people, adding that the company had become "too bloated". It would not be the first time Alibaba has spun off its business units. In 2011, the company hived off its fast-growing payments arm Alipay, which later evolved into the fintech major Ant Group.Bank of America analysts described Alibaba's restructuring as "an important experiment", which would test whether or not China's biggest companies could meet Beijing's demand to "contribute to society".
She added that a recent statement from China's cyberspace regulator about protecting entrepreneurs from defamation also signalled a possible end to regulatory pressure on the sector. In what many observers viewed as symbolic of the regulatory chill, Ma left China in late 2021 and was seen travelling to a number of different countries.
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