Game developer NetEase is eyeing a secondary listing in Hong Kong that could happen as early as the second half of 2020. According to Bloomberg, the company has already picked banks for the listing, including CICC, Credit Suisse and JPMorgan Chase.
Bloomberg also reported that NetEase has confidentially submitted an official listing application to the Hong Kong Stock Exchange. Chinese news outlet ipozaozhidao quotes sources estimating that Netease could raise between $1 billion and $2 billion in the process.
NetEase‘s form 20-F submitted to the US Securities and Exchange Commission (SEC) on April 29 showed that the company’s net income in 2019 was 59.24 billion yuan, an increase of 15.6% year-on-year. Gross profit reached 31.56 billion yuan, with the gross profit margin at 53.3%. The online game business is the main source of revenue for NetEase.
After Alibaba’s successful $13-billion secondary listing in Hong Kong in 2019, numerous other US-listed Chinese companies decided to follow suit. Recently, JD.com also confidentially submitted a secondary listing application in Hong Kong. UBS and Bank of America will act as underwriters. The e-commerce company expects to raise at least $2 billion.