NetEase To List In Hong Kong Too

NetEase To List In Hong Kong Too

almost 4 years ago2 mins

NetEase is already listed on the US stock market, but the Chinese company’s now planning a secondary listing in Hong Kong. Well, you can’t blame a tech giant for wanting to keep its options open… 🤷‍♀️

What does this mean?

Everything seemed to be going well between the US and China toward the end of 2019, when the two agreed to a truce that brought their years-long trade war closer to a resolution. But tensions have risen again this year with the two slinging mud at each other over coronavirus and, most recently, China’s intention to limit Hong Kong’s freedoms with a national security law 🔒

The US president wasn’t happy with China’s decision, and nor was the Senate: it’s since retaliated by passing a bill that’d bar Chinese companies from listing on US exchanges, and even go as far as to delist existing ones like Baidu, Alibaba, and NetEase 🇺🇸 🇨🇳 The latter’s decision to list elsewhere, then, is its way of protecting its own interests if and when the bill actually goes ahead.

Why should I care?

NetEase isn’t alone:, China’s second-largest online retailer, had the same idea. Both companies were likely emboldened by Alibaba’s own hugely successful $11 billion share sale in Hong Kong last year 💰 And seeing as some investors are worried China’s security law announcement will damage Hong Kong’s status as a major financial center, both new listings could give the region’s markets a much-needed boost too.

Source: The Wall Street Journal
Source: The Wall Street Journal

There might be another reason Chinese tech companies are heading to Hong Kong. The region’s stock exchange used to have rules banning companies from listing if they had “dual-class share structures” – the kind popular among tech companies whose founders want to keep disproportionate voting rights 📊 But after missing out on several major tech initial public offerings, the Hong Kong Stock Exchange decided to relax those rules almost a year ago to lure them back.

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