JD.com said to have approached UBS, Bank of America to arrange Hong Kong secondary listing

Minghe Hu

Nasdaq-listed e-commerce giant JD.com has reportedly approached Bank of America and UBS to arrange a secondary listing in Hong Kong, following a trend of US-listed Chinese tech companies seeking to move closer to home amid difficult conditions caused by the US-China tech war.

JD.com, China’s second largest online retailer, has been holding talks with investment institutions including Bank of America and UBS to arrange its fundraising for the listing, the Hong Kong Economic Journal reported on Monday, without citing sources.

The two financial institutions also underwrote JD.com’s 2014 initial public offering (IPO) in New York.

The Beijing-headquartered company has not submitted an application for its secondary listing to the Hong Kong stock exchange yet but is planning to do so as soon as the first half of 2020, Hong Kong investment site Ryanben Capital also reported on Monday, citing “informed sources”.

A spokesman at JD.com said the company had no comment on market rumours.

Baidu said to eye secondary listing in Hong Kong

“The possible listing [if true], can help JD.com extend its scale in the global financial market and minimise capital market uncertainties. It could also allow real-time trading for its stocks to the greatest extent,” said Chen Tao, a senior analyst at Beijing-based consultancy Analysys.

“After all, Hong Kong is closer to mainland China [than the US]. China is still JD.com’s citadel and Southeast Asia is a growing market with big potential and strong competition,” Chen said.

The success of Hangzhou-based Alibaba’s US$12.9 billion listing in Hong Kong last year – the second-biggest globally after Saudi Aramco’s IPO and the third-largest technology offering on record – could spur more Chinese firms to seek their own listings closer to home amid a more difficult business climate in the US due to the ongoing tech war, according to market watchers.

Alibaba is the parent company of the Post.

The Hong Kong bourse is said to be discussing secondary listings with Chinese technology companies including Ctrip.com and NetEase, and some of China’s biggest new economy names which have previously raised capital in the US could easily pursue their own secondary listings in Hong Kong. Internet giant Baidu is also reportedly weighing a secondary listing in Hong Kong and is said to have conducted an internal assessment of such a move.

JD.com reported earlier this month that its revenue in the fourth quarter had risen to 170.7 billion yuan, a 26.6 per cent year-on-year increase, thanks to a strong performance during November’s Singles’ Day shopping event and robust user growth.

Despite the impact of the coronavirus pandemic, JD.com foresees that its business will bounce back as its direct-to-consumer sales and in-house logistics model may prove more resilient to short-term disruptions, the company’s chief financial officer Sidney Huang said at its annual result conference earlier this month.

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