Alibaba is planning a secondary listing in Hong Kong, according to people familiar with the matter, one of whom said the Chinese ecommerce company was looking to raise some US$20 billion ($30.5b).
The company, which in 2014 raised US$25b in the US with the world's biggest initial public offering, is expected to complete the Hong Kong listing later this year, the people said.
One person familiar with the plans said the move was designed to diversify funding sources. But it also comes as China and the US face off in an increasingly broad trade war that has pushed Chinese technology companies towards greater self-reliance on domestic supply chains, technology and funding.
Alibaba declined to comment.
The listing would represent a win for the Hong Kong exchange, which lost out to New York in 2014 because its listing rules at the time did not allow for Alibaba's corporate structure, which gives founding partners, rather than shareholders, control over board appointments.
In 2018, HKEX changed its rules to allow "innovative companies" from China already listed elsewhere to do a secondary listing in Hong Kong even if their voting rights structures did not comply with local standards.
Charles Li, HKEX chief executive, told the Financial Times last year that the Alibaba listing in New York "gave us a huge opportunity to review our structure and allowed us to make a series of decisions that led us here today" as the exchange prepared the new rules.
Against the backdrop of the US-China trade war, Alibaba's New York Stock Exchange depositary receipts have fallen more than 20 per cent in the past 12 months but are still up nearly 130 per cent from their listing price five years ago.
"This is a very good opportunity not only for Alibaba, but also to persuade other [Chinese] companies listed in the US — if they don't want to come back to China at least come back to Hong Kong," said Daniel Wan, a partner at law firm Addleshaw Goddard in Hong Kong.
A listing in Hong Kong, he added, was preferable for foreign investors while also satisfying Beijing's desire for its biggest tech companies, which handle vast troves of Chinese user data, to list closer to home.
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Alibaba's plan to seek a secondary listing was first reported by Bloomberg.
The role and potential vulnerability of Chinese tech companies listed abroad has been viewed with increasing unease by Beijing since the start of the trade war.
"With all this trade war talk it seems like it's spreading to the capital market side," said on China tech banker. He said it sent "a signal of support to the country" that Alibaba was doing its bit to support the greater Chinese capital markets.
China is in the process of launching a new tech board in Shanghai that it hopes will become the top destination for local tech companies looking to go public. SMIC, China's biggest semiconductor maker, said last week that it was withdrawing its New York listing.
Like its peers, Alibaba has looked at various options for listing in China, including an abortive plan for China depositary receipts championed by Beijing.
That idea was scotched by the conflicting desires of the government, which had long sought to woo its national technology champions to domestic exchanges, and companies, which chafe at the less market-oriented practices on the domestic A-share market.
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Written by: Louise Lucas, Don Weinland and Hudson Lockett
© Financial Times