The first major corporation to benefit from a regulation change allowing high-tech Chinese companies with dual class shares to pursue dual primary listings in Hong Kong, Alibaba, will submit an application for a primary listing in Hong Kong and maintain its US listing.
The e-commerce giant’s move, announced on Tuesday, comes as both Washington and Beijing sharpen scrutiny over Chinese companies’ listings, and after a devastating regulatory crackdown in China left Alibaba with a $2.8 billion fine and scuppered an initial public offering (IPO) of its affiliate Ant.
Alibaba’s stock jumped 4% at the start of trading in Hong Kong as analysts said the change should give mainland China investors easier access to the shares via a link to the Hong Kong bourse known as the Stock Connect, Reuters reported.
Shares were up 5% while the Hong Kong benchmark (.HSI) was up 1.2%.
Alibaba said it expects the primary listing to be completed by the end of 2022.
Chief Executive Daniel Zhang said the dual listing would foster a “wider and more diversified investor base”.
The move comes after the Hong Kong Stock Exchange (HKEX) in January changed its rules to allow “innovative” Chinese companies – operating an internet or other high-tech business – with weighted voting rights or variable interest entities (VIE) to carry out dual primary listings in the city.
Hong Kong is also the launch pad for Alibaba’s globalisation strategy, and we are fully confident in China’s economy and future,” Alibaba’s CEO Zhang said.
