MEITU (01357.HK) opened 14.92% higher on May 21, reaching HKD6.78 per share, following news of a major investment from Alibaba Group (BABA-W, 09988.HK).
The rally was driven by a USD250 million funding deal and a new strategic partnership between the two companies. Early trading saw 12.7 million shares change hands, with a turnover of HKD86.1 million.
The partnership involves MEITU collaborating with Alibaba Network, a wholly-owned unit of Alibaba Group, or one of its designated affiliates. The two companies will work together in several key areas, including e-commerce, artificial intelligence, and cloud computing.
As part of the agreement, MEITU will issue three-year convertible bonds worth USD250 million to Alibaba Network. These bonds carry a 1% annual interest rate and an initial conversion price set at HKD6 per share.
Alibaba will also provide MEITU with cloud computing support. In return, MEITU has committed to purchasing at least RMB560 million worth of Alibaba cloud services over the next three years. The companies also plan to explore additional innovation opportunities together.
The partnership and bond issuance are still subject to approval from government authorities and other regulatory conditions.
(Note: HK stock quotes are delayed by at least 15 minutes. Short selling data as of May 21, 2025, 12:25 p.m.)
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