Alibaba investment sparks 259% rally in Chinese delivery firm

Getty Images / Xinhua News Agency

  • YTO Express Holdings soared 259% on Wednesday after Alibaba increased its investment stake in the Chinese delivery firm by nearly $1 billion.
  • Alibaba increased its holding from 10.5% to 22.5% in YTO Express, which is one of China’s largest logistics-services providers.
  • The parent company of YTO Express Holdings, YTO Express Group also surged 10% on the news.
  • YTO Express Holdings trades in Hong Kong, while YTO Express Group trades in mainland China.
  • Visit the Business Insider homepage for more stories.

When Alibaba makes a move, investors take notice.

So is the case with YTO Express Holdings, which soared 259% on Wednesday after Alibaba increased its investment stake in the Chinese delivery firm by $966 million.

YTO Express Holdings trades in Hong Kong.

Alibaba will purchase 379.2 million shares from a controlling YTO shareholder. The investment will more than double Alibaba’s stake in YTO Express Holdings from a previous 10.5% to 22.5%.

YTO Express is one of China’s largest logistics services providers and has seen a boom in business as Chinese consumers increased their ecommerce spend amid the COVID-19 pandemic.

Read more: ‘You can make 5, 10, 50X your money’: Here’s an inside look at the 7-part strategy small-stock expert Ian Cassel is using to unearth the market’s most overlooked gems

The parent company of YTO Express Holdings, YTO Express Group, also soared 10%, on the news in mainland China. 

Alibaba has been investing in a number of logistics providers over the years as it looks to better compete with JD.com, which owns its own in-house network of delivery providers. Other logistics companies Alibaba has invested in includes ZTO Express, STO Express, and BEST Inc.

A spokeswoman from Alibaba told the South China Morning Post about the investment: “We are pleased to further strengthen the strategic partnership with YTO, focusing on digitisation and globalisation to enhance customer service capabilities.”

Read more: Bernstein breaks down 4 reasons why red-hot growth stocks will keep soaring – and outlines how to build a safe portfolio designed to take advantage

Source: Read Full Article