JD.com, NetEase Hong Kong secondary listings

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Ecommerce company JD.com and Internet technology company NetEase completed their secondary listing on the Hong Kong Stock Exchange raising a combined US$6.6 billion.

Online retailer JD.com raised a total of around HKD29.8 billion (US$3.9 billion) from the offering, while gaming company NetEase netted about HKD 21.09 billion from the issuance. The two Nasdaq listed technology giants are among several US listed Chinese companies that are seeking secondary listing closer home.

He Li 何鲤

He Li, a partner of Davis Polk & Wardwell, told China Business Law Journal, “There are two noticeable reasons behind this homecoming. One is the Sino-US trade war and various US legislations against Chinese stocks. And the other is the further reforming and opening of China’s A-shares and Hong Kong capital market.” Davis Polk acted as the legal counsel to the joint sponsor and underwriter in NetEase’s secondary listing.

He said, the previous homecomings were mainly because of the US class action and the higher valuation in the A-share market. For Chinese companies listed in the US and considering coming back, they should think carefully about Sino-US relations, covid-19, and the global economy as “black swan” and “gray rhino” incidents are emerging. Companies should also consider geopolitics in the medium to long-term and think over their own needs.

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