Alibaba Group (NYSE: BABA) submitted a preliminary prospectus on the Hong Kong Stock Exchange website, which plans to issue 500 million new common shares through a global offering and list it on the main board of the Stock Exchange of Hong Kong. It has been disclosed that Alibaba Group’s American Depositary Shares will continue to be listed and traded on the New York Stock Exchange, each of which represents eight common shares.
Upon completion of the listing, the Group’s Hong Kong-listed shares and the NYSE-listed U.S. Depositary Shares will be converted to each other. It also means Alibaba Group will become the first Chinese internet company to list both in Hong Kong and New York.
As early as 2013, when Alibaba Group first sought an overall listing, Hong Kong was the preferred destination, but unfortunately missed the gap between the partnership governance mechanism and the HKEx system. On the first day of listing in the Us, Alibaba promised that “we will come back as long as conditions permit”. In April 2018, the Hong Kong market ushered in the most significant reform of the listing mechanism in nearly 25 years, “same shares of different rights” no longer become a barrier to listing, the mainland Internet companies to Hong Kong listing tide began.
In May 2018, it was announced that Alibaba planned to submit an IPO application to the Hong Kong Stock Exchange. On several occasions, the HKEx and Alibaba’s response has been more credible. Finally, in the expectation of all parties, flymore than a year of “boots” officially landed.
It was disclosed that Alibaba Group’s offering included 500 million common shares and an additional 75,000,000 new shares of common stock. This offering will include international and Hong Kong public offerings. Prices are expected to be set as early as November 20, Hong Kong time.
Hong Kong is one of the world’s three major financial centres. Despite many changes in the market so far this year, trading on the Hong Kong Stock Exchange has remained buoyant, with shares of Chinese-honged Chinese stocks rising more than 10 per cent so far this year, and in September, the world’s largest brewer, Budweiser AB InBev, listed in Hong Kong, raising $5bn, up 5 per cent.
Hong Kong’s proximity to Alibaba Group’s core business market helps to bring Alibaba closer to local and regional investors and further expand and enrich its investor base. In addition, the extension of trading hours also provides investors with greater flexibility.
According to the initial prospectus, the funds raised from the offering will be used to implement the company’s strategy, including driving user growth and engagement, enabling companies to achieve digital transformation and upgrading, and continuing innovation and investing in the long-term future.