What Is The Return Of Ali To Hongkong In Hong Kong?

According to relevant media, Alibaba group submitted a preliminary prospectus on the Hongkong stock exchange website and formally launched the Hongkong IPO plan. This means Ali will be the first China Internet Corporation to list in Hongkong and New York.

As a matter of fact, as early as 12 years ago, the Alibaba had interacted with Hong Kong. In November 2007, Alibaba listed B2B as the main body in Hong Kong stock exchange, raising HK $11 billion 600 million, which became the largest scale of China Internet Corporation financing at that time. After the listing, its share price has surged to 3 times the issue price, becoming the "Hong Kong stock new stock king" in that year, and the P / E ratio was over 300 times.

Due to the global economic crisis in 2008, the 2B business of Ali was greatly affected, and the share price began to collapse. Breakage in March 2008 dropped to HK $3.42 in October and dropped to 30% over the issue price. Compared with the previous 41.4 yuan high, fell by over 90%. Finally, in 2012, Alibaba announced that it would privatize the issue price of HK $13.5 / share and "leave" the Hong Kong stock exchange.

In 2013, when Alibaba group first sought the listing as a whole, Hongkong was the first place to choose. However, it was eventually transferred to the US because its share structure of the same shares was different from that of the Hong Kong stock exchange. On September 18, 2014, Alibaba landed at the New York Stock Exchange. When Ma Yun struck the bell in New York, he said, "as long as conditions permit, we will return."

Why should Alibaba return to Hongkong? In fact, not only Ali, but also new economic companies such as Xiaomi and the US group have come to Hong Kong after the new rules of "different rights" of the HKEx are opened.

First of all, Hongkong is one of the three largest financial centers in the world, and also an offshore financial center of China's economy. As China's economic strength has increased, the degree of opening up has been increasing, and the global economy has been profoundly affected. In the future, China's capital market is bound to attract more and more global quality enterprises.

Secondly, it is customary for large enterprises to go public in both places, and a major advantage is to meet the investment needs of many market investors. Alibaba and return to Hongkong enable mainland investors to invest through Shanghai and Hong Kong through Shenzhen and Hong Kong. Enterprises are more close to the mainland market and are easy to be accepted by the market and fully valued.

In addition, Ali chose to list in Hongkong for the two time, which is also related to the background of Sino US trade war. At the end of September, even the United States discussed the withdrawal of Chinese companies from the United States. Although the US Treasury quickly denied it, it virtually gave Chinese companies pressure.

For Ali, Alibaba health and Alibaba pictures have been listed in Hongkong, and Ali has a large number of related companies listed in Hong Kong. If the successful landing of Hong Kong stocks, it will help Ali revitalize resources and produce synergies. According to the prospectus, the Alibaba group issued 500 million shares of common stock and an additional share issue of up to 75000000 shares of common stock.

According to reports, Alibaba's listing is expected to raise about 15 billion US dollars (almost 100 billion yuan), which will help Ali use these funds to further force cloud computing and innovation business. According to the latest 2020 fiscal year Q2 earnings report, cloud computing, entertainment and innovation business have varying degrees of losses, but these businesses have broad prospects for development, especially cloud computing and innovative businesses.

Alibaba also said in its prospectus that the funds raised from the issue will be used to implement the company strategy, including driving user growth and participation, and continuing to implement new retail businesses to help enterprises achieve digital transformation and upgrading. For this reason, they continue to invest in cloud computing technology, supply chain management systems and marketing systems, and continue to innovate and invest in the long term future.

All in all, Ali's choice of Hongkong is a great boost to Hongkong's capital market, but also conducive to opening up capital markets other than the United States.