Alibaba intends to add a primary listing in Hong Kong to its New York presence, seeking mainland Chinese investors as the first major corporation to take advantage of a regulation change in the financial centre to attract high-tech Chinese enterprises. Alibaba’s Hong Kong-listed shares increased by 6%. The shares of the tech titan are already traded on both the New York and Hong Kong stock markets, but the Hong Kong listing is a secondary one.
The Hong Kong Exchange recently amended its regulations to make it simpler for more firms to get dual main listings in China’s financial centre. According to Reuters, Alibaba is the first significant corporation to take advantage of this law change.
The e-commerce giant’s decision, announced on Tuesday, comes as both Washington and Beijing increase their scrutiny of Chinese businesses’ listings, and after a catastrophic regulatory crackdown in China resulted in a $2.8 billion punishment and the cancellation of Ant Group’s initial public offering (IPO).
Alibaba went public on the New York Stock Exchange in September 2014, making it the biggest IPO in history at the time. Since 2020, the company’s share price has plummeted in both markets, owing to Beijing’s broad regulatory assault on Chinese IT firms.
Alibaba, which has had a secondary listing on the Hong Kong stock exchange since 2019, said it expects the primary listing to be completed by the end of 2022. According to CEO Daniel Zhang, the dual listing will nurture a “wider and more diverse investor base.” “Hong Kong is also the launch pad for Alibaba’s globalisation strategy, and we are fully confident in China’s economy and future,” said CEO Zhang. A VIE structure allows a Chinese corporation to establish an offshore organisation for overseas listing purposes, allowing international investors to purchase equity.
