Key Points 

• Alibaba shares rise on nearing Ant Group investigation conclusion
• Ant Group fined, signaling end to tech crackdown
• Fines and restrictions impact Ant Group's value and plans

The Hong Kong-listed shares of Alibaba increased 3% on Monday on expectations that the years-long investigation into its finance arm Ant Group is nearing a conclusion.

Chinese authorities fined Ant Group 7.12 billion yuan ($985 million) on Friday, which may have put an end to Beijing's campaign against homegrown tech firms.

The initial public offering of Ant Group was suspended in late 2020 due to listing restrictions. Alibaba was slammed with a $2.8 billion antitrust fine in 2021, while the world's largest food delivery company Meituan was fined 3.44 billion yuan the same year for breaking anti-monopoly laws. Didi, a major ride-hailing company, was fined 8.02 billion yuan in 2022 for breaking data security laws.

Chinese regulators announced on Friday that the majority of unresolved issues relating to platform companies' financial operations had been handled and that "normalized supervision" will be applied to the domestic digital sector.

Alibaba announced a significant restructure of its companies in March, which some observers believed would be an indication that the Chinese government may be loosening its control over the domestic IT sector.

Oshadhi Kumarasiri, an equities analyst at LightStream Research, stated in a study that was posted on the research platform Smartkarma that "However, [regulators] have also emphasized the need for additional broader industry-wide regulations to effectively regulate the entire sector."

Following Ant Group's penalties, Blue Lotus Research Institute's managing director, Shawn Yang, is optimistic about Alibaba.

According to our calculations, Ant Group is worth $89 billion, of which Alibaba owns a stake worth $29.4 billion. Yang made the comment in reference to Bloomberg's assessment of Ant Group, which ranged from $22 billion to $57 billion. "We suggest such valuation presents upside from consensus," Yang added.

According to state broadcaster CGTN, Ant Group launched a share buyback on Saturday that values the company at $78.53 billion. When Ant attempted to list in 2020, it was valued at $315 billion. This is less than that.

The buyback, according to Kumarasiri, "raises questions, especially if the company had plans for an IPO in the near future."