China Tech Firms Seek Hong Kong Listings -- WSJ
By Joanne Chiu
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 28, 2020).
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 for greater financial scrutiny
of Chinese companies.
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 Hong Kong's stock
exchange, people familiar with the situation told The Wall Street
If it secures the listing approval, NetEase would begin taking
orders from investors early next week, aiming to raise between $2
billion and $3 billion from the secondary listing ahead of a
trading debut on June 11, a person familiar with the situation
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 during the week of June 8.
Both fundraisings have been increased in size, compared with
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 Inc., a Chinese coffee chain
that only went public last year, have prompted heightened scrutiny
of U.S.-listed Chinese companies.
Legislation that has been passed by the Senate -- and has been
introduced in the House -- would kick Chinese companies off U.S.
stock exchanges unless their audits are inspected by U.S.
Meanwhile, Beijing's move to impose new national-security laws
on Hong Kong has raised concerns over the city's status as a major
On Wednesday, Secretary of State Mike Pompeo said the State
Department had determined Hong Kong no longer has a high degree of
autonomy from China.
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
Separately, on Wednesday the exchange's parent company, Hong
Kong Exchanges and Clearing, struck a 10-year licensing deal that
will allow it to offer futures and options based on 37 MSCI Inc.
stock indexes covering Asian and emerging markets.
HKEX Chief Executive Charles Li said the deal, which effectively
sees the exchange take the place of regional rival Singapore
Exchange Ltd. in offering these MSCI-based products, was the next
step in the group's international strategy, and said he was
confident in Hong Kong as a financial center. "I have every
confidence that we're going to come out on the other side, more
successful," after recent political and social turmoil, he
Shares in Singapore Exchange tumbled on Wednesday and fell
further on Thursday morning, taking their two-day decline to more
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 email@example.com
(END) Dow Jones Newswires
May 28, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
JD com (NASDAQ:JD)
Historical Stock Chart
From Aug 2020 to Sep 2020
JD com (NASDAQ:JD)
Historical Stock Chart
From Sep 2019 to Sep 2020