File photo/Liu Ling (NBD)

July 16 (NBD) -- Shareholders of Chinese tech behemoth Alibaba on Monday approved stock split that will see one ordinary share split into eight.

The share subdivision, which must come into effect no later than July 15 next year, means that the company will be increasing its number of ordinary shares from 4 billion to 32 billion.

The tech company said in a U.S. securities filing that the move would give it greater flexibility for raising capital, including issuing new shares.

The 1-to-8 split of the company’s U.S.-listed stock is perceived as Alibaba's paving the way for its Hong Kong listing.

"The approval of the stock split gets Alibaba another step closer towards a Hong Kong listing," said Zhao Xiaomin, CEO of Guanshuo Capital, in an interview with National Business Daily (NBD).

Zhao held that the share subdivision is aimed at speeding up Alibaba's IPO in Hong Kong, and is beneficial for investors, individual investors in particular, as it lowers the price of each share. The move could also facilitate liquidity of the company's U.S. listed stock, Zhao added.

To date, "No comment" has always been Alibaba's reply to the news of Hong Kong listing. The tech giant was reported in early June to consider a listing of its shares in Hong Kong to raise as much as 20 billion U.S. dollars.

Zhao told NBD that a Hong Kong listing of Alibaba, if succeeds, will become a benchmark, and there will be an increasing number of U.S.-listed Chinese companies following in the steps of Alibaba, Zhao expected.

NBD noticed that Alibaba shareholders on the same day also approved re-election of four directors to the company's board. They are Daniel Zhang Yong, Alibaba's chief executive, Tung Chee-hwa, former Hong Kong chief executive, Jerry Yang, co-founder of Yahoo Inc, and Wan Ling Martello, former Nestle chief executive.

Email: gaohan@nbd.com.cn