Trip.com, Netease in talks for secondary Hong Kong listings

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(Image credit: TechNode/Emma Lee)

US-listed Chinese tech giants Trip.com and Netease are gearing up for potential secondary listings on the Hong Kong stock exchange, Bloomberg reported on Thursday, citing people with knowledge of the matter.

Why it matters: Coming on the heels of Alibaba’s blockbuster $13 billion secondary listing in Hong Kong in November, the move may signal an influx of US-listed Chinese tech companies jumping on the dual-listing trend at a time when US authorities are heightening scrutiny of Chinese companies.

  • Hong Kong’s stock exchange has been hit hard by the city’s months-long pro-democracy protests. With more Chinese tech giants eyeing the market, the listings are seen as a vote of confidence and may boost the status of Hong Kong as a major capital hub.
  • Both Trip.com, China’s top online travel platform also known as Ctrip, and Netease, China’s second-biggest gaming firm, are among the biggest tech names in the country with a combined market value of about $60 billion, according to the report.

Details: Hong Kong Exchanges & Clearing Ltd. is in follow-up talks with Trip and Netease for their secondary listings on the bourse, according to Bloomberg.

  • The discussions are preliminary and subject to change, the report said.
  • Shares for the Hong Kong Exchanges rose 2.9% Thursday, their biggest gain in nearly four months, according to Bloomberg. Share prices rose as much as 3.7% by Friday afternoon.
  • Trip.com shares surged 10.2% and Netease stock price jumped 7.2% on Thursday.
  • A Netease spokesperson said the company would not comment on market rumors when contacted by TechNode on Friday. A Trip.com representative also declined to comment.

Context: Hong Kong removed the restriction on the dual-class structure in April 2018 to open the door for firms that sought to have share classes with different voting rights.

  • Trip.com made its debut on Nasdaq in 2003, raising $75.6 million at a valuation of $547 million. It now has a market cap of around $20.07 billion, according to figures from Yahoo Finance.
  • As one of the earliest Chinese tech firms to go public in the US, Netease went public in 2000 to raise $69.8 million. The company’s education unit Youdao made its debut in the US in October. The firm is planning to separately list its music-streaming service, Netease Cloud Music.