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William Ding Lei, founder and chief executive of NetEase, speaks during the 3rd World Internet Conference in Wuzhen, Zhejiang province, in November 2016. Photo: Simon Song

NetEase targets as much as US$3 billion in Hong Kong listing, as more Chinese companies eye move closer to home

  • NetEase is only the second company to launch a secondary listing in Hong Kong, following Alibaba in 2019
  • Its offering is expected to be one of several major secondary listings expected in the Hong Kong stock exchange this year

Chinese internet company NetEase aims to raise between HK$21.6 billion and HK$24.2 billion (US$2.8 billion and US$3.1 billion) in fresh capital via a secondary listing in Hong Kong, the video games giant said on Monday, making it one of the largest equity deals so far this year.

The offering is expected to be one of several major secondary listings in the Hong Kong stock exchange this year, as rising tensions between the US and China have led Washington to question whether Chinese companies should still be able to list in New York.

NetEase, whose American depositary shares are traded on the Nasdaq Stock Market, will list on Hong Kong’s main board. Its shares will trade under the stock code 9999.HK.

The company’s offer price was set at HK$126. It expects a maximum of about 24.2 billion shares to be offered to investors.

Coding should be part of basic education in China, NetEase CEO says

In its filings to the Hong Kong stock exchange, NetEase said one potential risk for investors was proposed US legislation that could force some Chinese companies to delist if their auditor had failed to comply with US audit oversight for three years.

NetEase will be the second company to launch a secondary listing in Hong Kong, following e-commerce giant Alibaba Group Holding in 2019, under a rule change in the city that finally allowed US-listed Chinese groups to seek such a listing. Alibaba is the parent company of the South China Morning Post.

Chinese e-commerce company is expected to follow NetEase, with plans to list on June 18. It could raise up to US$3 billion by selling down 5 per cent of its shares, Reuters has reported.

NetEase’s deal will be Hong Kong’s largest listing so far this year, according to Refinitiv data, and one of the largest in the world, depending on the final size.

NetEase, Japan’s Studio Ghibli team up to stream music from Hayao Miyazaki’s anime films

It comes as market activity is picking up again globally. On Friday, coffee maker JDE Peet raised 2.25 billion euros (US$2.5 billion) in its Amsterdam debut, while Warner Music is expected to price its offering of up to US$1.8 billion in New York on Tuesday.

Companies around the world have started to return to the capital markets, despite a global recession sparked by the coronavirus pandemic.

Companies have raised US$36.9 billion in initial public offerings so far this year, down by about a third from a year ago, according to Refinitiv.

This article appeared in the South China Morning Post print edition as: NetEase to launch secondary listing in HK