King Of The New Hong Kong Stock Market: What Is The Future Of Alibaba?

Ali returns to Hong Kong stocks

In November 26th, Alibaba listed on HKEx, opening HK $187 on the same day, closing at HK $187.6, up 6.59% from HK $176, with a turnover of HK $14 billion. The listing of Alibaba in Hongkong is good for Alibaba, HKEx and investors. For Alibaba, listing in Hongkong can attract more investors who understand China's consumption patterns and Alibaba's business models. This may be beneficial to the discovery of their value. Meanwhile, the listing of the United States and Hongkong has promoted the internationalization of Alibaba. For the HKEx, the listing of Alibaba will not only help to improve the circulation of Hong Kong stocks, but also play an exemplary role in the return of more stocks to Hong Kong stock market. For investors, not only has a valuable target in the investment of Hong Kong stocks, but also has more investment strategy choices.

Just invested $100 million in Africa to build a local version of "win in China" Ma Yun, and did not appear on the scene of Alibaba's return to Hong Kong stock.

"He is now in Africa. I haven't had time to speak to him. However, today's information is so developed that I believe he will be happy to see Ali in IPO, Hongkong. " In the morning of November 26th, after arriving at Four Seasons Hotels from the HKEx, Zhang Yong, chairman and CEO of Alibaba's board of directors, revealed in an interview with media reports in twenty-first Century, "returning to Hongkong" is more important.

At 9:30 a.m. that day, Alibaba group (09988.HK) was officially listed on the HKEx and became the first China Internet Corporation to be listed on both the US stock market and Hong Kong stock market. The opening day was HK $187, closing at HK $187.6, up 6.59% from HK $176. Based on this calculation, Alibaba's market value is HK $4 trillion and 10 billion, which surpasses Tencent in one go and becomes the number one company in Hongkong market. At the same time, it has become the world's largest new issue in 2019.

For listing in Hongkong, Zhang Yong said this is not the end, but the starting point. "Ali has changed greatly in the past 5 years, and has changed from an electric company to a digital economy. I feel that the outside world's expectation and support come from the confidence in the Chinese market, and we can see the future of China's digital economy. He stressed that globalization, big data and cloud computing will be the three long-term strategies for the future development of Alibaba. Although roots are in China, they must go global.

Where is the challenge of globalization? Fei Yiwen, an associate professor of finance at Antai Institute of economics and management, told an economic news reporter in twenty-first Century that many Chinese companies had a very low share price after their listing in the US. It is very important that foreign investors do not understand their business, and there are many situations that underestimate the share price of Chinese companies. "In foreign markets, some of them are able to go out and some of them will be in conflict. For example, Alipay is restricted in many countries, after all, it is related to finance. However, Alibaba's capital structure itself is globalized, and going out is the inevitable choice.

Capital market as an international fulcrum

As early as 2013, when Alibaba group first sought the overall listing, Hongkong was the preferred place, but unfortunately it was missed because of the estrangement between the partner governance mechanism and the HKEx system. However, on the first day of listing in the US, Alibaba said, "as long as conditions permit, we will return."

In April 2018, the Hongkong market ushered in the most significant listing mechanism reform in the past 25 years. "The same rights of different shares" no longer become the obstacles to listing, and the tide of mainland Internet companies' listing in Hong Kong is thus open. Finally, under the expectation of all sides, the boots that had been flying for more than a year were officially landed. At the HKEx scene, Zhang Yong said, "I particularly want to thank Hongkong and the HKEx for the fact that the past five years of innovation in Hongkong and the reform of the capital market in Hongkong have made us regret that we missed today."

It is also a fulcrum for the company to speed up the internationalization process to return to Hongkong market and let more investors know more about Alibaba. Hongkong is one of the three largest financial centers in the world. Although many changes have taken place in the market this year, the exchange of Hong Kong stock exchange is still active. Many companies' stock prices have risen significantly since the beginning of this year.

Take the US group as an example, the company's share price fell to HK $40 / share from HK $74 / share last year. This year, after the domestic consumer market has been well maintained, the company's share price has surged to around HK $100 / share. Behind the roller coaster's ups and downs, it is also inseparable from the view of the capital market on China's consumer market.

Zhang Zhouping, director and senior analyst of B2B, director of the electronic commerce research center, and Hongkong, are an important fulcrum for Ali's internationalization strategy. Ali's various business segments also landed in Hongkong. In 2007, the B2B business was listed on the HKEx (the delisting) and the landing operation of the business. In 2016, Tmall's "double 11" was first launched out of the mainland and started in Hongkong. In recent years, Ali has accelerated the pace of overseas expansion, but to gain more ground and better development in more overseas markets, the influence of capital market is very important.

As time goes on, investors are gradually realizing the value of Chinese companies. "Listing in Hongkong helps to narrow the gap between us and local and regional investors, further expand and enrich our shareholder base, and create a full time trading market for investors. As companies that are listed on two international exchanges, our US and Hong Kong stocks can transform each other, but the main listing status of the NYSE will not change. " Zhang Yong further revealed.

The internationalization of Hongkong will enable Alibaba to get more capital in Asia. For Alibaba, the investment of globalization is still in the stage of "igniting" fire, and it is still a long time away from truly creating revenue. To this end, we need a lot of resources to invest in technology and infrastructure.

Will it return to A shares?

Looking back to listing in the US in 2014, Alibaba's top management team was not involved in the ringing link, but was completed by eight partners on the eco chain, including couriers, Amoy girls and sellers. These personnel are closely related to the electricity supplier. At the scene of listing in Hongkong, it was also completed by Alibaba's 10 global partners.

It is understood that they come from eight countries in four continents, including China, Singapore, Holland, Malaysia, Thailand, Turkey, Australia and Rwanda, covering areas of cloud computing, financial services, logistics, Internet of things, and local life services.

This has also become a microcosm of Alibaba's transformation in the past 5 years. Because it is no longer an e-commerce company, but rather positioned in the digital business infrastructure. Fei Yiwen believes that after Alibaba's listing in the US, investors in the US responded poorly. The main reason is that Alibaba's business has broken through the traditional business rules. Foreign investors can not understand the actual business form of the Chinese market.

He believes that in the US market, Alibaba share price has not been particularly high, mainly because investors understand differently. After arriving in Hongkong, Hongkong and the mainland are getting closer and better understanding of Alibaba's business will give a better valuation.

After 12 years of ups and downs, this is also the third Alibaba IPO, compared with the previous two times, this treatment is extremely low-key. The conjecture left to the outside world is that Ali's next IPO is to split his flag business. Or is it the return of A shares? In this regard, Zhang Yong said, will closely follow all possible opportunities, Alibaba students in China, long in China, Ali will explore various possibilities.

"Today's Alibaba listing in Hongkong is an important milestone, but it is definitely not our end. The subscription is very hot, which shows that investors in Hongkong know Alibaba well. Because every investor may be our consumers, are our users, everyone is involved in such consumption ecology, we have a great resonance. This is also the reason why we support it. More importantly, we are optimistic about the future of the new economy and the future of the digital economy, and it is also our confidence in China. He said bluntly, 5 years ago and today's Ali is completely different, I believe that the next 5 years, 10 years later, Alibaba will be completely different.