By Martin Mou
Alibaba Group Holding Ltd. shares jumped Monday, after China's antitrust regulator slapped a record fine on the e-commerce giant following a monthslong investigation.
Alibaba's Hong Kong-listed shares, which opened 5.5% higher, were recently 7.9% higher at 235 Hong Kong dollars, when most other leading Chinese tech stocks were down.
China's antitrust regulator on Saturday imposed a fine equivalent to US$2.8 billion against Alibaba for abusing its dominant position over rivals and merchants on its e-commerce platforms, coming amid a wave of scrutiny on the business empire of company founder Jack Ma.
The penalty could put an end to the regulatory uncertainty associated with the antimonopoly investigation into Alibaba that started late last year, some analysts say.
Market concerns about the investigation are likely addressed by the recent decision and penalties from China's State Administration for Market Regulation, Jefferies says, adding this could foreshow "a new starting point" for Alibaba.
The 18.2 billion yuan fine is equivalent to 4% of Alibaba's domestic annual sales in 2019, according to the regulator. Under Chinese rules, antitrust fines are capped at 10% of a company's annual sales.
Citic Securities thinks this shows the penalty was modest and reflects the regulator's intention of using it as a warning to other tech giants of their potentially monopolistic business practices.
The financial impact of the fine looks manageable for Alibaba, which had a cash pile of more than CNY300 billion as of end-2020, the brokerage said.
Write to Martin Mou at email@example.com
(END) Dow Jones Newswires