BABA Alibaba Group Holding Limited

By Joanne Chiu 

Two of China's most valuable U.S.-listed companies are pushing ahead with multibillion-dollar share sales in Hong Kong, amid growing pressure from U.S. lawmakers on Chinese companies to disclose their financial information or delist.

The listing plans of NetEase Inc., an online games company, and JD.com Inc., the operator of an e-commerce website, will be reviewed on Thursday by the listing committee of the Hong Kong Stock Exchange, people familiar with the situation told the Wall Street Journal.

If it secures the listing approval, NetEase will begin taking orders from investors early next week, aiming to raise between $2 and $3 billion from the secondary listing ahead of a trading debut on June 11, a person familiar with the situation said.

JD.com plans to raise around $2.5 billion to $3 billion and start trading in Hong Kong on June 18, the date of its annual sales event, another person familiar with the situation said. It will kick off the stock sale in Hong Kong in the week of June 8.

Both fundraisings have been increased in size, compared to earlier plans, as the two companies' U.S.-traded securities have risen this year. The final sizes will depend on market conditions and the prices of their American depositary receipts as the secondary listing nears, the people said.

Bigger peer Alibaba Group Holding Ltd. raised roughly $13 billion through a stock sale in the city last November.

NetEase joined the Nasdaq in 2010. Its American depositary receipts have risen nearly 26% this year, giving it a market capitalization of nearly $50 billion as of Wednesday. The equivalent securities for JD.com, which went public in the U.S. in 2014, have risen 49% this year, giving it a market value of around $77 billion.

The listings come at a sensitive time for Chinese companies -- and for Hong Kong.

Rising U.S.-China tensions and recent admissions of accounting fraud at Luckin Coffee, a Chinese cafe chain that only went public last year, have prompted heightened scrutiny of U.S.-listed Chinese companies.

Legislation passed by the Senate -- and now introduced in the House -- would kick Chinese companies off U.S. stock exchanges unless their audits are inspected by U.S. regulators.

Meanwhile, Beijing's move to impose new national-security laws on Hong Kong has raised concerns over the city's status as a major financial hub.

Hong Kong's stock exchange has changed its rules to court more listings by tech and biotechnology groups, aiming to rejuvenate a market dominated by less dynamic sectors such as banking and property.

Robin Li, founder of Chinese search-engine operator Baidu Inc., this month told the state-backed China Daily newspaper the company paid close attention to heightened scrutiny of Chinese companies and was constantly exploring options including a secondary listing in Hong Kong or elsewhere.

Write to Joanne Chiu at joanne.chiu@wsj.com

(END) Dow Jones Newswires

May 27, 2020 09:05 ET (13:05 GMT)

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