Alibaba Group plans to split into six units and explore fundraisings or listings for most of them, it said on Tuesday, in a major revamp as China vows to ease a sweeping regulatory crackdown and support its private enterprises.

The U.S.-listed shares of the Chinese e-commerce conglomerate, which have lost nearly 70% of their value since the curbs started in late 2020, rose nearly 9% in early trading.

Alibaba said the biggest restructuring in its 24-year history would see it split into six units - Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media and Entertainment Group.

The revamp comes a day after its founder Jack Ma returned home, ending a year-long stay abroad and as Beijing looks to spur private sector growth after a two-year-long crackdown on its showpiece private enterprises.

“The original intention and fundamental purpose of this reform is to make our organisation more agile, shorten decision making links and respond faster,” Chief Executive Daniel Zhang said in a letter to staff, which was seen by Reuters.

Each business group, he said, had to tackle the rapid changes in the market and each Alibaba employee had to “return to the mindset of an entrepreneur”.

Zhang will continue as chairman and CEO of Alibaba Group, which will follow a holding company management model, and also serve as CEO of Cloud Intelligence Group.

Each of the six businesses will have a CEO as well as a board of directors and will retain the flexibility to raise outside capital and seek an initial public offering, the company said.

The exception would be Taobao Tmall Commerce Group that handles China commerce businesses and will remain a wholly owned unit of Alibaba Group.

Zhang said the company would “lighten and thin” its middle and back office functions, but did not detail job cuts.

Investors said the announcement stems concerns that Alibaba had lost growth potential and signals the clearing of regulatory worries.

“It releases additional value,” said Kenny Ng, a strategist at China Everbright Securities in Hong Kong.

“With this expectation, investors will be more positive on Alibaba. It may reflect a new round of development for the business and reduce worries of regulatory issues.”

MA’S RETURN

The restructuring is among the biggest corporate moves by a major Chinese tech company in recent years, as the industry cowered under tighter regulatory oversight, causing deals to dry up and dampening risk appetite among businesses.

Lately, authorities have been softening their tone towards the private sector as leaders try to shore up an economy battered by three years of strict COVID-19 curbs.

Companies, however, have been hesitant, privately pointing to a lack of new supportive policies and the new regulatory framework.

Alibaba’s shares had received a boost on Monday after founder Ma returned to China, ending a stay overseas of more than a year that industry viewed as a reflection of the sober mood of its private businesses.

China’s new premier, Li Qiang, had recognised Ma’s return to the mainland could help boost business confidence among entrepreneurs and since late last year had begun asking him to come back, five sources with knowledge of the matter told Reuters.

“It does seem something of a coincidence that this is happening just as Ma seems comfortable returning. To me it suggests something that Alibaba has been wanting to do for some time, but has been waiting for the opportunity,” said Stuart Cole, head macro economist at brokerage Equiti Capital.

The restructuring “does inject an element of flexibility and adaptability into the company, which currently is something of a behemoth,” he said.

China’s cyberspace regulator vowed on Tuesday to clamp down on malicious online comments that damage the reputation of businesses and entrepreneurs, amid an official drive to shore up the private sector and spur economic growth.

“False information against enterprises and entrepreneurs, especially private enterprises and private entrepreneurs, appear from time to time, damaging the brand image of enterprises,” said Shen Yue, an official with the Cyberspace Administration of China, when answering a question at a news briefing.

Shen said it also affects normal production and operation of enterprises, resulting in economic losses.

The regulator will “severely crack down on illegal online activities that maliciously damage the image and reputation of enterprises and entrepreneurs, and even seek illegal benefits from them,” Shen said.