BEIJING, Jan 1 (Reuters) - China's Alibaba Group Holding

Ltd ( BABA ) said on Wednesday it had agreed to sell its

majority stake in hypermarket chain Sun Art Retail Group ( SURRF ) to

Chinese private equity firm DCP Capital for HK$12.298 billion

($1.58 billion).

The 78.7% share represents holdings held by Alibaba ( BABA )

subsidiaries, according to a filing to the Hong Kong Stock

Exchange.

Alibaba ( BABA ) 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 ( BABA ) reshuffling of its

business portfolio to focus on its core e-commerce operations.

($1 = 7.7677 Hong Kong dollars)