US-listed Chinese new-economy companies are mulling secondary flotations in Hong Kong after watching Alibaba’s shares soar, says China Renaissance
- A wave of Chinese internet giants that have listed in the US by issuing American depositary receipts are considering following Alibaba’s lead and aiming for a secondary flotation in Hong Kong, say bankers
- But the recent launch of Shanghai’s Nasdaq-style Science and Technology Innovation Board means Hong Kong now faces competition from mainland China to attract new-economy firms
More US-listed Chinese companies belonging to the new economy are mulling a potential secondary listing in Hong Kong or China, prompted by the strong performance of Alibaba since its debut on the Hong Kong bourse in November, according to bankers at China Renaissance.
A secondary listing in Hong Kong could widen the investor base for these Chinese issuers, said Sam Lee, managing director and head of equity research, as institutional investors from China would still be able to easily access the stocks trading on the Hong Kong bourse.
“[Arranging] secondary listings has become a new and growing business for us. I’d say more and more senior management at these US-listed Chinese companies are listening to our advice on a secondary listing now, compared to a year ago,” said Lee.
The recent launch in Shanghai of the Nasdaq-style Science and Technology Innovation Board, or Star Market, meant Hong Kong now faced stiff competition from mainland China to attract new-economy firms, he added.
“Ultimately whether the Hong Kong or China market would win these listings is something we would have to wait and see,” said Lee.