Alibaba Or The Hong Kong Stock Market In The Year To Usher In The New Wind Direction

"We did not expect Hongkong regulators to make changes for a Alibaba company."

This is an open letter issued by Cai Chongxin, executive vice president of Alibaba group six years ago. After a year of pros and cons and mediation, the Alibaba finally went to the US in September 2014 and missed the HKEx. Now Hongkong regulators have changed their attitude.

In November 6th, it was reported that Alibaba will seek approval for listing in Hongkong next week, raising funds from 10 billion to 15 billion dollars. In response, Alibaba responded in an interview with the economic news reporters in twenty-first Century, saying no comment was made. It is understood that Alibaba's financing scale is between 78 billion and HK $117 billion. CICC and Credit Suisse are listed sponsors.

From the date, Alibaba is likely to seek listing permission from the Hongkong exchange and clearing house limited after the "double eleven" Shopping Festival, and may be listed at the end of November or early December.

"Alibaba should finish listing this year. On the one hand, the RMB appreciation is expected to be relatively high. On the other hand, the negotiations between China and the United States turn to optimism and investors' enthusiasm is also high. If the market is sluggish, it will also be bad for the companies that just listed. " A head of overseas investment in a public offering institution said in an interview with the economic news reporters twenty-first Century that Alibaba will surpass Tencent and the US group and become the vane of the Hong Kong stock market.

In November 6th, it was reported that Alibaba will seek approval for listing in Hongkong next week. - Song Wenhui photo

Expected to be listed in the year

Previously, the Alibaba and the Hong Kong Stock Exchange split up because of their differences in the same rights and shares. The entanglement of this crucial issue led to the final breakup of the negotiations between the two sides. The HKEx, the Hongkong Securities Regulatory Commission and the Hong Kong government have no intention of changing the listing rules. Cai Chongxin believes that this is just a different idea, there is no right or wrong. He told the media, "partner system is used to nominate most directors, and does not violate the interests of shareholders, because major transactions, shareholder transactions and independent directors are all shareholders' participation, so we have not deprived them of their rights and interests."

In September 18, 2014, Alibaba listed on the New York stock exchange IPO, raising $25 billion, setting the world's largest IPO transaction record. Since listing, Alibaba shares have risen more than 2 times the original issue price. As of 6 November, U.S. stocks closed at a market capitalization of US $473 billion 850 million.

According to the plan, the Alibaba was scheduled to be listed on the HKEx in August this year, but it has been postponed for some reason. If it is successfully listed on HKEx, it will become the largest IPO transaction in HKEx's history. On the news of Alibaba's return to the Hong Kong stock market, Li Xiaojia, chief executive officer of the Hongkong exchange, recently responded that "it is a secret that can not be said".

He said that the new stock market has been developing steadily, and 128 enterprises have been listed since the beginning of this year. The number of relevant companies should be the number one in the world, with a total fund-raising of more than HK $140 billion, and third of the global new stock financing temporarily. However, there will be good projects coming to Hong Kong for the rest of the year. The Alibaba official expressed silence on the news.

The purpose of Alibaba is to expand diversified financing channels and improve liquidity. In an interview with the economic news reporters in twenty-first Century, a Hong Kong equity investment company member said that Alibaba itself is not short of money, and that the return to Hong Kong stock financing is a win-win situation for the enterprises themselves. "After financing, we can prepare for the future economic situation that is likely to slide, so that we can keep our grain in mind. In addition, domestic investors can invest in Alibaba through the form of Hong Kong stocks and share the fruits of growth, and more importantly, it is expected to reshape the confidence of Hongkong's financial center.

In fact, since Alibaba's listing in the US in 2014, the voice of Alibaba once again attempting to return to Hongkong's capital market has not been broken. In January 8th this year, the chief executive of Hongkong, Lin Zheng Yue e, sent an invitation to Alibaba to return to Hong Kong on an event. The chairman of the Alibaba board Ma Yun responded on the spot, "we will seriously consider the Hongkong market."

At present, under the influence of many factors such as policy and external environment, the return of Alibaba can be described as "time, place, place and benefit". Earlier, some investment professionals said that the audit of such enterprises could be similar to the IPO audit of Hong Kong stocks. The faster issuers are expected to control the audit time in about 3 months. Therefore, it is expected to be listed this year.

Tang Zhehui, an audit services partner of Ernst & young, said that the HKEx has been promoting mainland and overseas listed companies to work in Hong Kong. As the second place of listing, the HKEx aims to be an innovation industry company. According to the regulations of the new and innovative industries listed in the HKEx announced by the HKEx in April 2018, relevant companies need to be listed on the New York Stock Exchange, NASDAQ and LSE. Recently, there are good compliance records in the last two fiscal years. When Hongkong is listed as the second market place, the market value is expected to be HK $10 billion.

Or become blue chips for Hong Kong stocks.

In 2018, Hongkong raised the top spot in the world through IPO, but this year the situation has changed markedly. According to Refinitiv data, the HKBU's current financing scale lagged behind the New York stock exchange and the NASDAQ Exchange. As of mid October, it raised $18 billion 500 million, while the scale of financing of the New York stock exchange and NASDAQ Exchange was $21 billion 900 million and $23 billion 300 million respectively.

The head of overseas investment of the aforementioned public institutions believes that after the listing of Alibaba in Hongkong, it is expected to attract some incremental funds, and more investors in the Asian market can also participate. "In general, it is a positive influence. Alibaba already has a mature business model. Its rapid growth period has passed, but there are still many potential to be excavated, which may become the vane of the Hong Kong stock market and become a big blue chip stock.

Alibaba's latest quarterly Q2 quarterly report shows that the company's second quarter revenue was RMB 119 billion 20 million yuan, an increase of 40% over the previous year. Net profit of $32 billion 750 million, an increase of 40% under non GAAP, and net profit attributable to ordinary shareholders amounted to RMB 72 billion 540 million, representing a 262% increase over last year's growth rate in 2020.

Its core business electricity providers and cloud computing continued to exert power in Q2: the second quarter revenue of e-commerce platform was 75 billion 786 million yuan, an increase of 40% over the same period, and cloud computing Q2 revenue reached 9 billion 291 million yuan, an increase of 64% over the same period last year. In addition, the local life service has grown significantly, with revenue reaching 6 billion 835 million yuan, an increase of 36% over last year.

In addition, Alibaba disclosed in its earnings report that it became the 33% holder of ant gold clothing in September 23rd. The income from Alibaba's one-time ownership of the ant's gold suit was 69 billion 200 million yuan (about 9 billion 700 million US dollars), which also brought about a rapid increase in income. The return of Alibaba will also boost confidence in the Hongkong market.

According to the new IPO regulation of HKEx, not only will dual equity structure companies be allowed to go public, but also biotech companies that are not yet profitable will be allowed to list in Hong Kong. For the issuers of different equity structures, the HKMA's market consultation concluded that the minimum expected market value of the relevant listed companies should reach HK $40 billion. If the market value is less than HK $40 billion, it is necessary to earn HK $1 billion in the latest financial year.

Since last year, the Hong Kong Stock Exchange ushered in the climax of the listing of China's new economic company. Although the market has experienced a low tide, confidence in the market is recovering. Since the beginning of this year, a group of Chinese consumer stocks, such as the comments on the US stock market in the Hong Kong stock market, seabed fishing, Lining and so on, have been stunning, showing a sharp contrast to the increase in the Hang Seng Index of only 3.38%.

According to Wind data, as of October 18th, 37 of the top 100 of Hong Kong stocks rose from daily consumption or optional consumption, accounting for nearly 40%, with the largest increase of 451% and the smallest increase of 71%. Alibaba's share price in the US also started to pick up, and this year, its share has risen by more than 30%.

In the face of the huge consumption market in China, can Alibaba go to another peak in Hong Kong stocks? Market participants have high expectations.