NetEase and JD.com Transitioning to Hong Kong Listings

Matty-Sways

Two Chinese companies seek a secondary listing on the Hong Kong exchange just in case.

Chinese e-commerce giant JD.com Inc. and online-gaming company NetEase Inc., two of China’s leading companies that are U.S.-listed, have taken measures to move towards listings in Hong Kong, The Wall Street Journal reported.

The two companies are following the e-commerce giant Alibaba Group Holding Ltd. in choosing a secondary listing location closer to their home market in mainland China, due to the increasing tensions between the U.S. and China.

The Senate passed a bill in May that could remove Chinese companies from U.S. stock exchanges unless American authorities could inspect their audits, a regulation that further drove Chinese companies to seek Hong Kong listings.

On Friday, JD.com started taking investor orders for a Hong Kong share sale that could reach $3.76 billion, and plans to start trading on June 18 under the stock code 9618.HK.

NetEase, who is a rival to Tencent Holdings Ltd., prepared to raise around $2.7 billion from its share sale. This second largest mobile game company in the world will start trading on June 11 under the stock code 9999.HK.

Orders outnumbered the NetEase shares on offer, which showed the depth of interest in these listings, even though NetEase’s New York-traded securities have been available for purchase for a long time.

NetEase set the offer price for stock sale at HK$123 ($15.87) a share on Friday. Units of China International Capital Corp., Credit Suisse and JP Morgan were the joint sponsors for the NetEase deal, and BofA Securities, UBS and Citic Securities were joint sponsors for the JD.com listing.

See the full report here.

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