The Chinese tech giant said it will apply for a dual primary listing in Hong Kong before paring some of the gains.
Both the U.S. and Hong Kong exchanges have traded the tech giant's shares.
The company said in a press release that the primary listing process in Hong Kong is expected to be finished by the end of 2022.
More companies will be able to get dual primary listings on the Hong Kong Exchange. The first large company to take advantage of the rule change isAlibaba.
The Board has given us the go-ahead to apply to add Hong Kong as another primary listing venue in the hopes of fostering a wider and more diversified investor base.
The stock of the Chinese company was up more than 5 percent.
Ronald Wan said that the move is strategic because the Hong Kong market has not offered as much money to the Chinese company as the U.S. market.
He told CNBC on Tuesday that they need to bring in mainland investors to invest in the stock market.
The Shenzhen-Hong Kong Stock Connect will allow investors in mainland China to have access to the stock when it is listed in Hong Kong.
Chinese electric vehicle makers Xpeng and Li Auto are included in the stock connect scheme because they have dual primary listings in Hong Kong and the U.S.
The turnover and speed of companies with a secondary listing in Hong Kong are lower than in the U.S. according to a report from January.
A proxy for shares of foreign companies that list in the U.S. in the form of American depositary receipts is called an American depositary receipt.
Even as the U.S.-China dispute over accounting issues continues, Wan said thatAlibaba is preparing itself.
There is an audit dispute that has threatened U.S.- listed Chinese companies with delisting.
He said that if something goes wrong, the company can shift its primary listing to Hong Kong.
He thinks it will be a good move for the company.
Evelyn Cheng worked for CNBC.
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