Opinion | The three big listing themes in 2014

All eyes on Alibaba in the technology front while investors remain wary about city commercial banks and Huarong may revive plans to sell shares

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Internet giant Alibaba is planning for what could be the biggest technology initial public offering after Facebook. Photo: Reuters

Published: 12:22am, 6 Jan 2014

While Hong Kong's equity market may have yet to shake off its holiday lethargy, IPO Watch is casting a glance back into 2013 to explore three important issues that may serve as a guide for stock picking among this year's listing hopefuls. At least one of the trends is likely to emerge as the defining issue of the city's listing market in 2014.

Alibaba is already an online retail star. Now fresh speculation suggests that the mainland internet giant will become the toast of the stock market in the second half of 2014. The fundamentals and prospects are bright for Alibaba, which owns a number of highly profitable portals, including Taobao and Tmall.

As Alibaba plans for what could be the biggest technology initial public offering after Facebook, any valuation of the offered shares is definitely tricky. Instead of the traditional yardstick of a price-earnings ratio, some analysts are looking to a different measure: the firm's proposed market capitalisation to sales over the past 12 months. This new gauge may help retail investors swot up on Alibaba's prospects before making a bet on the household name.

Shares in the then business-to-business firm Alibaba.com which were priced at a record price-earnings ratio of 100 times, initially soared after a listing in 2007. Later, they were largely ignored by investors due to slowing growth. This stands in contrast to the blockbuster performance of Tencent.

Inspired by the runaway success of Twitter's listing in the United States last year, other mainland e-commerce operators such as Jingdong Mall, which operates as 360Buy.com and Wal-Mart-backed Yihaodian may revive their listing plans. Market participants expect their listing schedules may converge in head-to-head competition with Alibaba. Twitter posted a return of 73 per cent after a month of trading, compared with a drop of 21 per cent for Facebook.

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.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}All eyes on Alibaba in the technology front while investors remain wary about city commercial banks and Huarong may revive plans to sell shares

All eyes on Alibaba in the technology front while investors remain wary about city commercial banks and Huarong may revive plans to sell shares