Alibaba (NYSE: BABA) said yesterday that Hong Kong’s stock exchange has cleared the spin-off and separate listing of T-Head, its AI-chip unit. The Chinese e-commerce, cloud and AI group, also listed in Hong Kong as 9988.HK, gave no size, valuation or date.
The US shares fell 2.52% yesterday to close at 102.72, from 105.38 on Monday. The fall looks more tied to wider pressures than to the listing news. The stock is about 22.4% below its 132.32 close on the 10th of August and 4.8% above its low close of 98.04 on the 30th of October.
T-Head confidentially filed for a listing on the 11th of September, a private application not yet public. Alibaba’s regulatory announcement of the 10th of November says the exchange confirmed it may proceed with an H-share listing (mainland-company shares traded in Hong Kong) on the main board. It would combine a Hong Kong public offering with a placement to institutional and professional investors. T-Head, wholly owned today, is expected to remain a subsidiary.
The listing still needs approval from the exchange’s Listing Committee and a filing with China’s securities regulator, the CSRC, and Alibaba says there is no assurance it will complete or when. It obtained a waiver from giving existing shareholders an assured entitlement, a guaranteed priority share allocation, citing disproportionate costs and regulatory complexity. Alibaba says a standalone listing lets investors assess the chip business independently, could improve access to equity and debt financing, and could raise T-Head’s profile with customers, suppliers and partners.
T-Head is seen as a rival to Nvidia. It launched its Zhenwu V900 chip in late September, which Alibaba says delivers three times the performance of the Zhenwu M890 released in May. That is Alibaba’s own claim against its earlier chip, not a comparison with Nvidia.
Listings of Baidu’s Kunlunxin chip unit and memory-chip maker YMTC have reportedly been delayed. Separately, Bloomberg reported that Alibaba signed contracts for offshore access to Nvidia chips, and short seller Culper Research alleged in May that Alibaba obtained restricted Nvidia chips through indirect financing. Alibaba did not respond to the allegation.
The backdrop is hot US inflation and a Trump–Xi meeting next Wednesday and Thursday. For traders, the signposts are Listing Committee and CSRC approval and any disclosure of size or valuation.