China’s Alibaba Group Holding Ltd said on Wednesday it had agreed to sell its majority stake in hypermarket chain Sun Art Retail Group to Chinese private equity firm DCP Capital for HK$12.298 billion ($1.58 billion).

The 78.7% share represents holdings held by Alibaba subsidiaries, according to a filing to the Hong Kong Stock Exchange.
Alibaba paid $3.6 billion for a controlling stake in Sun Art in 2020 in the hope of further leveraging its digital presence to support Sun Art’s hundreds of hypermarkets in China.

The disposal of the stake comes after an 85% jump in Sun Art’s shares in Hong Kong in the past year, which easily beat an around 20% rise in the main Hang Seng Index.

The e-commerce giant is also selling its Chinese department store unit Intime even if it books a loss from the deal.
The stake sales are part of Alibaba’s reshuffling of its business portfolio to focus on its core e-commerce operations.