Alibaba Group Holding has been added to a growing list of Chinese companies that face potential delisting from US stock exchanges, days after the e-commerce giant announced plans to seek a primary listing on Hong Kong's bourse with the aim to diversify its investor base.

The US Securities and Exchange Commission (SEC) on Friday included Alibaba, owner of the South China Morning Post, to its watch list of US-listed Chinese firms that face removal from American exchanges under a 2020 law, the Holding Foreign Companies Accountable Act (HFCAA).

Under that law, foreign companies may be delisted if they fail to submit their audit papers to a US accounting oversight body for three consecutive years. This means the three-year countdown for Alibaba to comply with the requirement has started.

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Alibaba could end up being the biggest Chinese firm to be delisted in the US if it does not meet that legal requirement. The Hangzhou-based company did not immediately respond to a request for comment on Saturday.

Visitors are seen outside the New York Stock Exchange building on September 19, 2014, when the Chinese e-commerce giant started its first day of trading after raising US$25 billion from its initial public offering. Photo: Shutterstock alt=Visitors are seen outside the New York Stock Exchange building on September 19, 2014, when the Chinese e-commerce giant started its first day of trading after raising US$25 billion from its initial public offering. Photo: Shutterstock>

The SEC's move sent Alibaba's American depositary shares down 11 per cent on Friday to close at US$89.37. The company has lost nearly two-thirds of its valuation since its peak in late 2020 amid regulatory pressures in both China and the US, and a weakening global macroeconomic environment.

Apart from Alibaba, three other mainland Chinese internet companies - Mogu, Cheetah Mobile and Boqii Holding - and one Hong Kong entity, metal stamping firm Highway Holdings, were added by the SEC to its watch list on Friday.

More than 150 Chinese companies are now on the SEC's provisional line-up of firms to be delisted, including e-commerce services providers JD.com and Pinduoduo, video-sharing platform operator Bilibili and electric carmaker Nio. They were added to the SEC's watch list of companies "deemed to be liable to HFCAA" as each one filed their annual report. Alibaba filed its report last Tuesday.