Alibaba kicks off HK listing process
HONG KONG: Chinese e-commerce giant Alibaba Group launched the share sale for its Hong Kong listing yesterday, braving unrest in the global financial hub to try to raise up to US$13.4 billion (RM55.5 billion) to fund its expansion plans.
The books for institutional investors looking to buy the shares opened during the New York trading session yesterday.
A 661-page draft prospectus for what looks set to be the world’s biggest cross-border secondary listing shows Alibaba plans to use the money to invest in online delivery and local services platform Ele.me, as well as online travel group Fliggy.
It will also spend more on developing Youku, which Alibaba says is one of the leading online video platforms in China.
The share sale, set to be Hong Kong’s largest in more than nine years, is a boost for the city, which has sunk into its first recession in a decade as more than five months of street protests and worries about the United States-China trade war took their toll.
The progress of the protests is being monitored by Alibaba and its advisers, and is seen as a risk to the deal going ahead, according to sources with direct knowledge of the matter.
The institutional book-building for the listing will run for a week and the stock is expected to be priced on or around Nov 20, said two sources.
A maximum price for the retail component of the deal would be announced next week, one said.
The people could not be named because the information has not yet been made public. Alibaba stock is due to start trading the week of Nov 25.
The company also intends to increase its investment in cloud computing and machine learning, the prospectus shows.
The Hangzhou-based company said Alibaba Cloud was currently the world’s third largest Infrastructure as a Service business, by US revenue last year, according to a study by Gartner.
The prospectus shows Alibaba has 960 million “digital economy users” in China, including customers of its Ant Financial partnership.
The company said its revenue was 410.8 billion yuan (RM242.3 billion) for the year to June 30 and the total assets on its balance sheet were worth 1.01 trillion yuan.
The Hong Kong shares are expected to be offered at a discount of up to five per cent of the US equivalent.