Alibaba Group Holding (NYSE:BABA) owned Sun Art Retail Group’s suspension of trading signaled speculation of Alibaba’s divestment of stake in the hypermarket operator, SCMP reports.

In October 2020, Alibaba purchased a controlling stake in Sun Art from France’s Mulliez family for 28 billion Hong Kong dollars ($3.6 billion).

SCMP cited Bloomberg as saying the hypermarket operator drew preliminary offers from private equity firms like DCP Capital and Hillhouse Investment.

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Chinese companies recently received a boost from China’s stimulus plans, which aim to spur demand. Shawn Yang of Arete Research and Appaloosa Management founder David Tepper expects Alibaba to be the prime beneficiary of the stimulus due to its moat.

Sun Art’s topline declined by 13.3% in the year ended March 31 to 72.6 billion yuan ($10.3 billion) due to the contraction of its supply chain business and store closures.

Alibaba reported fiscal first-quarter 2024 topline growth of 4% to $33.47 billion, lagging the analyst consensus of $34.81 billion. China’s retail commerce revenue declined by 2% to $14.78 billion, while international commerce retail business revenue grew by 38% to $3.26 billion.

Price Action: BABA stock is up 1.74% at $107.97 at the last check on Tuesday.

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This article Alibaba's Sun Art Faces Uncertainty as Trading Suspension Fuels Divestment Rumors: Report originally appeared on Benzinga.com

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