JD, Baidu, other Chinese tech giants reportedly eye Hong Kong listings

Ecommerce giant JD.com, search engine Baidu, and other Chinese tech companies are considering a secondary listing in Hong Kong following Alibaba’s successful market debut in the country.

Photo credit: The Stock Exchange of Hong Kong

The US-listed companies, including travel services provider Ctrip, internet tech firm NetEase, and fast-food chain operator Yum China, could raise a total of US$15 billion, four people familiar with the matter told Nikkei Asian Review.

The companies are currently still holding talks with investment banks such as Goldman Sachs, Credit Suisse, Bank of America, and China International Capital Corp for the potential listing.

Though the plans are still in the early stages, talks are expected to accelerate after the Lunar New Year holiday ends on January 27, the people said. Some of the listings may also come within the first half of 2020, subject to market conditions, they added.

According to a Bloomberg report earlier this month, the Hong Kong stock exchange (HKEX) was in follow-up talks with Ctrip and NetEase about a potential second listing. Chinese media also reported that Baidu has already completed an internal assessment for a secondary listing in Hong Kong.

Additionally, IFR said last week, citing people privy of the matter, that Yum China is mulling a listing in Hong Kong that could raise as much as US$2 billion.

According to Nikkei, HKEX chief executive Charles Li said last week that he anticipates more US-listed Chinese companies to look into a second listing in Hong Kong, as the move will bring them closer to home and the majority of their customers.

“I think just by their nature they will come. They will potentially get a better valuation re-rate [as their] customers know [their] business and [may] want to become a shareholder,” the exec said.

In its secondary listing in Hong Kong, Alibaba raised HK$101.2 billion (US$12.9 billion) by selling 575 million new shares to investors. According to an Alibaba official, mainland institutional investors and fund houses took up about a third of the international tranche in Alibaba’s offering. The retail portion was oversubscribed by about 40 times, brokers said.