Not the right time for Alibaba’s listing in Hong Kong: analyst

By Ma Jingjing and Wang Yi Source:Global Times Published: 2019/11/11 22:48:42

Universal Beijing Resort and Alibaba Group Strategic Partnership Announcement Ceremony Photo: Courtesy of Comcast Corporation

Alibaba should postpone its reported listing in Hong Kong, as the city's ongoing social unrest will have an adverse impact on investor sentiment in the short term, an industry analyst told the Global Times on Monday.

"Now is not a good time for Alibaba to get listed in Hong Kong, because escalating violence in the city will affect investors' confidence, though the impact may be slight," Zhang Yi, CEO of Shenzhen-based iiMedia Research.

Recently, many media have reported that Alibaba plans to get listed in Hong Kong following "Double 11", the largest shopping spree in China, aiming to raise up to $15 billion.

However, the e-commerce giant has declined to comment when reached by the Global Times over the past week.

An investment banker in Hong Kong close to the matter, whose employer  has sponsored the Hong Kong IPOs of several mainland companies, confirmed to the Global Times on Monday that Alibaba has a plan to list in Hong Kong at the end of November. The person declined to be identified.

Alibaba needs to get listed in Hong Kong to supplement its capital amid fierce competition in the internet sector in the Chinese mainland, while reducing reliance on the US capital market amid China-US trade war, Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times on Monday.

Recently, Alibaba made some adjustments to its businesses. On Friday, the company announced plans to increase its stake in logistics affiliate Cainiao Smart Logistics NetWork from 51 percent to 63 percent, with additional investment of 23.3 billion yuan ($3.33 billion).

It said the investment would be used to subscribe to newly issued Cainiao shares and acquiring an equity interest from an existing shareholder.

Reuters reported that Alibaba had been planning an IPO in August, but delayed it because of the lack of financial and political stability in Hong Kong after months of social unrest.

On Monday, the day of the "Double 11" shopping bonanza, Alibaba saw sales on the platform break 100 billion yuan within 63 minutes. However, Liu Dingding, an independent analyst in the internet sector, told the Global Times that he was afraid the remarkable figure was not enough to increase the company's market appeal, given many mainland companies' flat performance in Hong Kong this year.

Posted in: COMPANIES

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