HK Stock Market Move | SUNART RETAIL (06808) fell more than 3%, previously Alibaba discounted to clear its inventory, the company's stock price is facing short-term pressure.

SUNART RETAIL (06808) fell more than 3%, as of the time of writing, down 3.24% to HK$1.79, with a turnover of HK$12.225 million. On the news front, a report by DBS Bank downgraded SUNART RETAIL from "buy" to "hold" with a target price reduced from HK$3.10 to HK$2.10. Alibaba sold 78.7% of SUNART RETAIL's equity to Dehong Capital for RMB 13.1 billion, which represents a 29% discount to the last trading price of HK$2.48 per share. This implies a P/B ratio of 0.7x for the fiscal year 2026, lower than the market expectation of at least 1x, which could put pressure on SUNART RETAIL's short-term stock price. Morgan Stanley pointed out that Alibaba's sale of SUNART RETAIL could have a negative impact on Haxin's share price, as the offer price is significantly below the closing price before the announcement. However, Morgan Stanley believes that SUNART RETAIL's share price is supported at the offer price level, estimating the net asset value per share of SUNART RETAIL to be HK$2.50. Morgan Stanley also stated that even if less than 90% of non-Alibaba shareholders accept the offer, SUNART RETAIL will still remain listed. Although Alibaba and Dehong Capital's fund have reached a consensus on the transaction, regulatory approval is still pending.