China’s two e-commerce majors announced impressive news on the same day: Alibaba Holding Group’s market cap broke the $400 billion mark for the first time; rival JD also saw its share price hit a record high of $46.84.

Alibaba’s shares reached a record high of just over $160 in trading Thursday, generating a market cap of $409 billion. The price has since slipped but is part of an onward trend for the e-commerce and tech giant which has seen its share price rise steadily since a low of $60.89 in February 2016. In Q2 2017 alone, the company’s stock has risen 31% on the New York Stock Exchange. The surge followed the announcement in March of revenue growth of 45% to 49% over the following year.

Alibaba's lows and high (Image Credit: Yahoo Finance)
Alibaba’s lows and high (Image Credit: Yahoo Finance)

This new high has been a long time coming. Alibaba’s launch price was $68 per share on September 19, 2014, and closed at $93.89. It then promptly slid for the next month. By March 2017, 2.5 years since going public, they had recovered to just over $100, a gain of just 11% compared to a 28% increase for the NASDAQ in general and 21% for the Dow Jones Industrial Average.

After its overvaluation at launch, Alibaba’s recent rally shows an increase of 135% meaning it is catching up with other global big boys.

Over the same period, Amazon’s market capitalization rose from $152 to $407 billion, and then on to $499.96 billion today, a 228% increase. Similar patterns can be seen for other tech majors such as Facebook, Alphabet, and Apple. On the day of Alibaba’s IPO in 2014, Tencent’s shares were at HK$125, HK$207 in early March and HK$305 now, 145% growth, an even greater increase than Alibaba’s recent surge.

JingDong sees record high Thursday 27 July (Image credit: Yahoo Finance)
JD sees record high Thursday 27 July (Image credit: Yahoo Finance)

JD has seen a similar pattern to rival Alibaba, after its IPO a couple of months earlier. By the time Alibaba joined it as a publicly-listed company, JD was trading at $28.35 and also reached a new high on Thursday, of $46.84, an increase of 65%.

Frank Hersey is a Beijing-based tech reporter who's been coming to China since 2001. He tries to go beyond the headlines to explain the context and impact of developments in China's tech sector. Get in...

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