China firms prepare for Plan B

Staff Correspondent

23 May, 2020 12:00 AM printer

China's biggest tech players are reaching for contingency plans for raising capital on the heels of the U.S. Senate passing legislation that could oust them from the New York exchanges.                

A common pillar of those contingency plans is to pursue dual listing closer to home, primarily in Hong Kong, as trading on Wall Street shows heightened political risks, report Nikkei Asian Review.

Game developer NetEase leads the pack, having applied for a Hong Kong stock market debut, Chinese media report. The initial public offering, which could happen as early as June, is expected to raise roughly $2 billion. The Guangzhou-based company listed on Nasdaq in 2000.

Search giant Baidu, which went public on Nasdaq in 2005, is also exploring a similar approach as it weighs a delisting from the New York-based market, said a person with the knowledge of the matter.

Travel-booking platform Trip.com Group is reportedly in talks with banks regarding a Hong Kong secondary listing as well.

The three companies would join recent homecomings by other peers, such as Alibaba Group Holding, which conducted a dual listing in Hong Kong last year, and JD.com, a fellow Chinese e-commerce giant trading on Nasdaq, which has also applied for a secondary listing in the Asian financial hub.

Shares of NetEase, Baidu, Trip.com, Alibaba and JD.com all opened lower Thursday, as did other large-cap Chinese securities traded in the U.S., such as PetroChina and China Petroleum & Chemical Corp., despite an oil demand rebound in China.

U.S.-listed Chinese enterprises face new pressure as the US Senate passed a bill Wednesday that would delist a Chinese company whose auditing firm has not undergone a screening by American regulators for three years.


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