Chinese internet firm Sina ‘planning secondary share listing in Hong Kong’
The listing is likely to take place in the fourth quarter and comes after the Hong Kong bourse changes its listing rules
Chinese web portal and social media firm Sina Corp is planning a secondary listing in Hong Kong, in what would be one of the first floats to take advantage of the city’s new rules designed to attract tech equity offerings, two sources said.
Nasdaq-listed Sina, which has a 46 per cent stake in China’s Twitter-like Weibo Corp, is working with advisers on the listing that is likely to take place in the fourth quarter, said the sources with direct knowledge of the matter.
The offering size is yet to be finalised, the sources said on condition on anonymity as the deal details were confidential.
Sina did not respond to a request for comment.
The listing plan comes after Hong Kong Exchanges and Clearing, (HKEX), the city’s bourse operator, loosened its rules to woo Chinese new-economy companies, including tech firms and early-stage drug developers.
Under the new rules, firms in Greater China that listed in New York or on the main board of the London Stock Exchange on or before December 15, 2017 are allowed to list in Hong Kong with their existing weighted voting rights structures – which give greater powers to founding shareholders.
This is a big shift for Hong Kong whose one-share-one-vote principle has for 30 years blocked efforts by tycoons from Li Ka-shing to Alibaba’s Jack Ma to list alternative shareholding structures.
Alibaba held its record US$25 billion public float in New York in 2014 after Hong Kong refused to accept its governance structure, where a self-selecting group of senior managers control most board appointments.
Hong Kong is hoping that easing rules for secondary listings and allowing primary listing of companies with dual-class shares will help it compete better with New York and mainland China.
Shanghai and Shenzhen have also begun courting the same set of offshore-listed tech firms for a form of secondary listing through the development of Chinese depositary receipts (CDRs).
But according to draft rules issued by the China Securities Regulatory Commission, tech firms listed overseas must have a market value of at least 200 billion yuan (US$31.3 billion), leaving only four – Alibaba, Tencent, JD.com and Baidu – eligible for CDRs.
Hong Kong’s secondary listing rules allow mainland companies valued at more than HK$40 billion (US$5.10 billion) to float. Sina has a market capitalisation of about US$6.5 billion.
As one of China’s first tech firms to list on Nasdaq in 2000, Sina, incorporated in the Cayman Islands with dual-class shares, makes most of its revenue from online advertising on its news portals and Weibo. That has worried investors as the growth rate of Chinese online advertising slows.
Sina shares have slipped 26 per cent over the three months, versus a 1.2 per cent gain in the Nasdaq Composite Index.
Alibaba owns the South China Morning Post.