Alibaba trading at half of Hong Kong utility’s valuation after drop

THE years-long rout in shares of Alibaba Group Holding amid regulatory crackdowns and weak consumption has left the Chinese e-commerce giant trading at just half the valuation of venerable utility CLP Holdings.

Alibaba’s valuation almost halved in the past year, after it was hit by sluggish domestic online sales, fierce competition and scepticism over its future as it scrapped plans to spin off its cloud business and changed leadership.

Its Hong Kong-listed stock is now trading at just 7.6 times estimated earnings for the next 12 months, compared with more than 13 times for CLP.

Down 77 per cent from its record high in 2020, Alibaba is also trading at about half the valuation for main rival Tencent Holdings, which has held up better thanks to more-resilient demand for its games business.

Shares of CLP — which is more than 120 years old — have actually risen in the past year helped, by dividend payouts and cooling input fuel costs. BLOOMBERG