BABA ADRs: How to convert Alibaba ADRs to Hong Kong Shares?

For investors who own American depositary receipts (ADRs) of Chinese companies like Alibaba (ticker: BABA), the risk of a US delisting has been a recurring concern since 2020. If you hold BABA ADRs, you may wonder how to convert them into Hong Kong shares (ticker: 9988), as not all brokers provide this service and the process is not straightforward.

In this article, we walk you through the process, the costs, the broker that allows conversion of Alibaba ADRs to Hong Kong shares, and how to request it.

The long-standing caution toward Chinese stocks listed in the US continues, though investor behaviour has become more nuanced. The Holding Foreign Companies Accountable Act (HFCAA), signed in December 2020, allows the US to delist companies whose auditors cannot be inspected by the US audit regulator (PCAOB) for two consecutive years. The immediate risk eased in December 2022, when the PCAOB said it had obtained full access to inspect audit firms in mainland China and Hong Kong, but the law remains in force.

Concerns resurfaced in April 2025, during the US-China tariff escalation, when Treasury Secretary Scott Bessent said “everything is on the table”. At the time, Goldman Sachs estimated that US institutional investors held about $830 billion in Chinese equities, including about $250 billion in ADRs, and its ADR delisting barometer pointed to elevated risk (Benzinga). Major names like Alibaba, JD.com and PDD were in focus, particularly firms without a listing outside the US (Reuters).

Despite this caution, US listings remain attractive: the first half of 2025 saw 36 Chinese companies go public in the US, after a record 64 in 2024 (Reuters). At the same time, Hong Kong has positioned itself as the natural alternative, with the HKEX chief executive saying Hong Kong can “easily accommodate” returning Chinese ADRs (The Standard).

For Alibaba specifically, the Hong Kong option became stronger in August 2024, when it upgraded its Hong Kong listing to a primary listing, making the shares eligible for the Southbound Stock Connect from September 2024, which lets mainland Chinese investors buy them directly. At the time of writing, Alibaba’s ADRs still trade on the NYSE.

Delisting a stock means removing it from an exchange, so it can no longer be traded there. In Alibaba’s case, it would no longer trade on the NYSE. In that scenario, it could still be traded over the counter (OTC), but liquidity risk rises as fewer traders are ready to purchase or sell the stock, and the spread between buying and selling prices widens.

Yet, Alibaba is also listed on the Hong Kong Stock Exchange (HKEX) with the ticker “9988”, and a US delisting would not affect those shares. That is why converting ADRs into Hong Kong shares is a precaution. Both give the same exposure to the Alibaba group: one BABA ADR represents 8 ordinary shares traded in Hong Kong.

If you prefer to hold regular shares rather than an ADR, you must request the conversion through your broker. The conversion usually takes two to three business days after you submit the request, depending on Hong Kong and US working hours. We list below the main steps that should be followed to complete the conversion (as described by Citibank, which acts as Alibaba depositary in New York):

1. Contact your stockbroker: get in touch with your broker’s customer support requesting the conversion from ADRs to ordinary stock shares, as many brokers do not offer this service. If that’s your case, jump to the alternative.
2. Submit the conversion request: your broker will provide you with the conversion form that must be completed, which gives them the authority to act on your behalf and convert your shares. This process can be done electronically on the broker’s website or platform.
3. ADR cancellation: Citibank New York will cancel the ADRs and instruct its custodian, Citibank Hong Kong, to “withdraw” the underlying ordinary shares.
4. Delivery and custody: once the conversion is completed, the ordinary shares may be deposited into your account electronically.

Finally, converting ADRs to ordinary shares has a cost. The depositary bank charges an ADR cancellation fee, your broker may charge a fee for handling the conversion, and trading the shares in Hong Kong later involves local costs such as stamp duty. Because some of these fees are fixed, conversion usually only makes sense for larger positions.

While most brokers do not offer ADR conversion services like BABA to 9988, one global broker does:

Founded in 1978, Interactive Brokers is a global online broker listed on the Nasdaq (ticker: IBKR) and part of the S&P 500 since August 2025. Its platform offers stocks, options, mutual funds, ETFs, futures, bonds and currencies from 170 markets in 40 countries, including the Hong Kong Stock Exchange, so you can hold and trade 9988 directly after the conversion.

Interactive Brokers lets you convert your Alibaba ADRs to ordinary shares through the Voluntary Election Tool in the client portal (see the step-by-step guide). As for the fees, Interactive Brokers charges a $500 depositary fee and a $17 wire fee per conversion, plus a creation/redemption fee of $0.05 per ADR and any external costs that might arise.

With a fixed cost of $517 per request, converting a small position can cost more than a few days of price movement, so it mainly makes sense for larger holdings.

Want to know more about Interactive Brokers? Check our Interactive Brokers review.

Bottom line

While the probability of Alibaba being delisted from the US may still be low, investors are watching every development from the US and Chinese authorities.

Some investors prefer to hold Hong Kong shares as a precaution. If you want to convert your Alibaba ADRs into ordinary Hong Kong shares, Interactive Brokers is the main broker that offers the service, although the fixed fees mean it suits larger positions best. An alternative is to sell the ADRs and buy 9988 directly in Hong Kong, which may be cheaper for small holdings but can trigger tax on any gains.

This article is not intended to encourage investors to convert their shares, it is instead solely for informational purposes. So, it is best to do your research and due diligence before proceeding.

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