The Chinese tech titan upgraded its listing in the city to primary status last month, paving the way for its addition to the Stock Connect cross-border scheme that allows traders in Shenzhen and Shanghai to buy certain shares in Hong Kong.

The firm rallied as much as 5.2% in early trade, easily outpacing the Hang Seng Tech Index and broader market.

The stock is expected to attract about US$20 billion worth of inflows into next year and mainland investors will likely build a stake of more than 10%, according to Bloomberg Intelligence.

Alibaba has underperformed the market in recent years owing to weak consumption and Beijing’s crackdown on the tech industry, with its Hong Kong-listed shares down more than 70% from its 2020 peak.

The Hangzhou-based firm last month reported a 29% drop in quarterly profits, citing sluggish Chinese consumer activity.

Chairman Joe Tsai said earlier this year that Alibaba planned to “tap into the southbound capital flow” via Stock Connect.

The programme is open to institutional investors and individuals with at least 500,000 yuan (US$70,000) of assets in brokerage accounts.

Alibaba has been primarily traded in New York since 2014 and was dual-listed after going public in Hong Kong in 2019.