(Bloomberg) -- Alibaba Group Holding Ltd. shareholders have approved a plan to upgrade its Hong Kong listing to primary status on Aug. 28, a maneuver expected to attract billions of dollars in investment from mainland China.

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Shareholders ratified the decision as expected to convert the Hong Kong listing, a plan first broached two years ago amid heightened tensions with the US. That allows Alibaba to join a program that connects the Shanghai and Shenzhen bourses to Hong Kong’s exchange. The stock opened largely unchanged in Hong Kong on Friday.

Alibaba’s shares have underperformed those of key rival Tencent Holdings Ltd. amid concerns over the impact of competition and sluggish China consumption. Last week, the online retailer posted an anemic 4% rise in revenue after its Chinese e-commerce business shrank for the first time in at least a year. Profit plunged 27%, dispelling hopes of a quick turnaround.

Shares of Alibaba are up only about 8% this year in Hong Kong, while rivals Tencent and Meituan have gained about 30% each. China’s weak retail sales have hurt Alibaba’s key business, while price wars in cloud services are curbing the growth of a potential new driver.

What Bloomberg Intelligence Says

Alibaba’s conversion to a primary listing in Hong Kong starting Aug. 28, from its current secondary status, raises the likelihood that the stock will be included in the Shanghai-Hong Kong Stock Connect through which qualified mainland Chinese investors can purchase its shares. This inclusion, which is pending approval from authorities in both locations, may occur early next month, based on our checks.

- Catherine Lim and Trini Tan, analysts

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Estimates for the capital inflow from joining the so-called southbound connect program range from about $12 billion in the first six months after inclusion, to around $19.5 billion.

Alibaba faces several longer-term challenges beyond capital structures and the Chinese economy.

Chief Executive Officer Eddie Wu is spearheading an overhaul at a conglomerate that since the big tech crackdown of 2020 has struggled to consistently deliver on growth and innovation.

Wu, who replaced Daniel Zhang at the helm about a year ago, is focused on enhancing its twin businesses of commerce and cloud computing, while making bets on AI technology for the longer term.

--With assistance from Jeanny Yu.

(Updates with share action, analyst commentary from the second paragraph)

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