Baozun, Zai Lab join march of New York-listed companies to raise more capital in Hong Kong as US-China ties deteriorate

E-commerce Baozun, biotech firm Zai Lab launch Hong Kong public offerings as more US-listed firms seek listings closer to home

A spate of secondary listings help end this week as one of the busiest in fundraising, as ZTO Express has also launched US$1.6 billion deal

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A scientist works at Zai Lab's drug development facility in Shanghai on October 18, 2017. Photo: REUTERS

Published: 2:30pm, 17 Sep 2020Updated: 10:34pm, 17 Sep 2020

Two New York-listed Chinese companies filed plans to raise more funds in Hong Kong this week, joining a steady march of secondary listings as they seek to bolster their finances closer to home to hedge against risks amid deteriorating US-China relations.

E-commerce operator Baozun and pharmaceutical producer Zai Lab Limited, both headquartered in Shanghai, will sell additional shares on the Hong Kong stock exchange, adding to the US$4 billion of initial public offerings (IPOs) this month that make September the busiest month for the bourse since hosting a record 24 listings in July.

Baozun, 14 per cent owned by this newspaper’s owner Alibaba Group Holding, will kick off its sale on Friday of 4 million shares to Hong Kong investors, out of a global offering of 40 million shares, according to a term sheet. The company is seeking to raise about US$500 million, according to earlier media reports. Zai Lab is aiming to raise US$832 million through the sale of 771,000 shares at HK$648 (US$83.61) per share to local investors, with another 9.79 million shares to international investors..

The two Chinese companies joined the march that began with Alibaba’s US$13 billion secondary listing in Hong Kong last November, the first such stock offer on the city’s bourse. That was followed in quick order by NetEase, JD. Com and Yum China Holdings, which together raised US$10 billion to help Hong Kong catch up with New York as the worlds favourite IPO destination this year.

These secondary listings followed threats by US politicians to expel Chinese companies from Wall Street amid a bruising trade war and the worst bilateral ties between the two nations in decades. The US State Department had instructed American colleges and universities to divest their holdings in Chinese companies, warning of the potential for “wholesale delisting.”