Bloomberg has reported that Alibaba will choose China International Capital Corp. and Credit Suisse Group AG to lead the share sale for their Hong Kong offering. A formal filling is expected to come in the next few weeks, and the listing could raise as much as $20 billion for Alibaba. This massive capital injection would augment the company’s competitiveness in cash intensive verticals like food delivery and travel, where it directly competes with Wang Xing’s Meituan Dianping, which is also listed on the HKEX.
While the details of the deal are yet to be finalized, and no relevant party would comment on the speculation, Alibaba’s Hong Kong listing would be a significant coup for the city of Hong Kong and its exchange. Following other high profile IPO’s including Xiaomi and Meituan Dianping, Hong Kong has increasingly been able to attract top tier Chinese tech companies, especially in light of the intensifying trade tension between the U.S. and China. Chinese ADR’s have recently not performed well on U.S. exchanges, which could lead many Chinese tech firms to look to Hong Kong as an alternative in the future, as there is no end in sight of the inflammatory trade war rhetoric in the foreseeable future.
Featured photo credit to CGTN