Chinese tech firm NetEase eyes Hong Kong secondary listing

(L-R) The Hong Kong Exchanges flag, Chinese national flag and Hong Kong flag are hoisted outside the Hong Kong Stocks Exchange in Hong Kong June 7, 2016. REUTERS/Bobby Yip

Chinese technology group NetEase is set to become the next major mainland company to sell its shares in Hong Kong, two sources familiar with the matter said, in a secondary listing that one media report said could raise up to $2 billion.

The company has appointed China International Capital Corporation (CICC), Credit Suisse and JPMorgan to lead the transaction, sources said, requesting anonymity because the information has yet to be made public.

NetEease, Credit Suisse and JPMorgan declined to comment on the deal. CICC did not respond to a Reuters request for comment outside of Asian business hours.

IFR earlier reported that NetEase could look to raise up to $2 billion in the Hong Kong share sale.

The Nasdaq-listed NetEase has a $42.5 billion market capitalization, according to Refinitiv.

The company’s chief financial officer, Charles Zhaoxuan Yang, is a former investment banker at JPMorgan, according to the company’s website.

NetEase‘s decision to carry out a secondary listing follows a similar move by JD.com which is aiming to raise up to $3 billion in a deal that could occur as early as June.

JD.com is working with Bank of America and UBS on the listing.

A listing of both companies would be a big win for the Hong Kong capital markets which have battled to attract major deals in 2020, primarily due to the coronavirus outbreak.

Refinitiv data shows there has been $12.81 billion worth of equity capital market activity in Hong Kong during 2020 but primarily in follow-on deals and convertible bond transactions.

In comparison, there has been just $2.45 billion worth of IPOs in 2020, according to Refinitiv, down from $4.27 billion for the same time in 2019.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.