triples in value to £13bn on Hong Kong debut

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The investor appetite for Chinese stocks has reached fever pitch with shares in the business-to-business internet company nearly tripling on its first day of trading.

The stock now sits on a valuation of more than 300 times its projected earnings for this year, a rating that makes the current valuation of the US stock market darling Google look dirt cheap. is the largest technology listing since Google lit up the markets in 2004 and its debut performance on the Hong Kong stock exchange yesterday suggests the e-commerce platform has captured the imagination of investors desperate to gain exposure to one of the world's biggest growth markets.'s storming debut came only a day after PetroChina, the largest energy company in the country, became the first company ever to achieve a valuation of $1 trillion (£479bn) after its first day of trading in Shanghai on Monday.

The stunning performance in Chinese shares has led to concerns that a Chinese bubble has emerged with valuations far in excess of the current earnings power of the companies, although that does not appear to have deterred investors who have helped drive the Shanghai market up well over 100 per cent this year. raised £750m via its flotation on the Hang Seng index, but demand for the shares vastly outstripped supply with individual investors clamouring for a piece of the action ordering more than 250 times the amount of stock on offer. Shares were listed at HK$13.50, but surged to HK$39.50 by the end of trading in Hong Kong.'s market valuation of nearly £13bn at the end of the day dwarfs the £19m in profit it recorded in the first six months of the year, highlighting that the company has an awful lot to do to fulfil its potential.

Jack Ma, the 43-year old founder and chairman of Alibaba, said: "The growth today reflected our IPO price wasn't that expensive."

Mr Ma, a former English teacher, founded the e-commerce site in his apartment in Hangzhou in eastern China eight years ago in order to create a platform for small and mid-sized Chinese companies to connect with foreign buyers. Both suppliers and buyers can use the site for free, with making its money when members subscribe to a premium account that gives them preferential access to buyers.

With an estimated 42 million small and mid-sized businesses in China, the market potential opportunity is huge, according to Mr Ma. already handles more than 40 per cent of online business-to-business transactions in China, according to analysts. The company also intends to use the funds it has raised to enter new markets including Hong Kong, Taiwan, Japan and India and intends to make a number of strategic acquisitions. It said it is already in talks with companies in Taiwan and Japan to launch local versions of the platform.

The site is part of a wider set of internet-based companies under the Alibaba Group stable – China's largest online company – which includes a series of sister companies that could also be floated in the future.

Yahoo!, the US search giant, holds a 39 per cent stake in the larger group, with Cisco Systems, the telecoms equipment company, and the Japanese telecoms company Softbank also large shareholders.