Alibaba investment sparks 259% rally in Chinese delivery firm
- 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.
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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.
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."