LOADING AWESOME
LOADING AWESOME
Homecoming IPO
Alibaba is reportedly planning to raise US$20 billion via a second listing in Hong Kong, after a floatation plan in the city flopped six years ago. China Daily has the full picture
Homecoming IPO
Alibaba is reportedly planning to raise US$20 billion via a second listing in Hong Kong, after a floatation plan in the city flopped six years ago. China Daily has the full picture
Alibaba sought a listing in HK with a dual-class structure in mid-2013
Homecoming IPO
The Hong Kong Exchange and Clearing Ltd (HKEx) prohibited the listing of companies with differential voting structures
• On the grounds that it would violate the long-held principle of “one share, one vote”
Alibaba decides against HK IPO in October 2013
Background
Alibaba completed the largest IPO in history on Setp 19, 2014, raising US$25 billion in its New York Stock Exchange offering
Its shares have more than doubled since its debut, giving the company a market value of about US$423 billion
(as of June 12, 2019)
Stock split into different categories
Homecoming IPO
What is dual-class share?
Owners of one class enjoy greater voting rights
Enabling minority shareholders, usually founders, to retain control of the
company
Companies adopting the model include Facebook, Google, New York
Times etc
One-hour living circle
Homecoming IPO
HK listing revamp
The revamp helped HK clinch 2 of the hottest tech IPOs in 2018 by Xiaomi Corp and
Meituan-Dianping
Green light for dual-share classes granted
Listing of pre-revenue biotech companies allowed
Secondary listing of mainland and international firms already listed overseas allowed
The pain of losing Alibaba IPO prompted the HKEx to revamp its listing rules in April 2018
One-hour living circle
Homecoming IPO
Alibaba’s second listing plan in HK
(according to people familiar with the matter)
To be HK’s 2nd largest after AIA IPO in 2010
Possible date
2nd half of 2019
Fund to be raised
US$20 billion
To diversify funding channels and boost liquidity
Aim
A major victory for
HK in battle for tech listing, trumping Shanghai and Singapore, which also eased rules to attract
fast-growing companies with dual-share
classes
One-hour living circle
Homecoming IPO
Benefits
Bolstering HK’s status as a destination for Chinese tech listings
Serving as an inducement for more tech companies to choose HK
Boosting overall trading as investors prefer technology stocks to old economy firms
Liquidity would be tightened in the weeks surrounding listing, strengthening the local dollar
To Hong Kong
Homecoming IPO
Boosting its cash pile as it wages a costly war of subsidies with Meituan-Dianping in food delivery and travel
Securing a buffer if its NY shares fall victim to global anxiety about China-US trade tensions
Potentially a better valuation if the household name became a favorite among retail investors in HK
Avoiding delisting risk as US may require listed firms to submit open audit books to American regulators
Benefits
To mainland
Mainland
investors can buy HK-listed companies with dual-class share structures via exchange links starting in July
2019
Stocks also available to mainland investors through Stock Connect programs
To Alibaba
Source: Bloomberg, HKEx
Concept and editing: Anisha Bhaduri
Research: Carol Sin
Design: Alex Tang