Report: Alibaba Is Considering A $20 Billion Second Listing In Hong Kong

By Noah Long ● May 29, 2019
  • Alibaba Group Holding Ltd is reportedly looking to raise $20 billion through a second listing in Hong Kong according to Bloomberg’s sources
  • A listing application in Hong Kong is expected to happen as early as the second half of 2019

Alibaba Group Holding Ltd is reportedly planning to raise $20 billion through a second listing in Hong Kong following a record $25 billion New York-based IPO in 2014 according to Bloomberg’s sources. And Alibaba is already working with financial advisers on the offering.

The sources said that Alibaba is aiming to file a listing application in Hong Kong confidentially as early as the second half of 2019. A second listing would enable Alibaba to diversify its funding channels and boost liquidity. However, the plans are preliminary and could potentially change.

Currently, there are tensions between China and the U.S. government over tariff wars. Since Alibaba is based out of China, a Hong Kong listing may be rewarded by local investors.

“A large part of it is politics, especially because of the timing,” said David Dai, a Hong Kong-based senior analyst at Sanford C. Bernstein via Bloomberg. “Another part of it is potentially better valuation in the Hong Kong market.”

One of the biggest reasons why Alibaba went public in New York is due to a unique structure where a  small group of partners decide board membership — which was not approved by regulators in Hong Kong. These restrictions have been reduced and now dual-share classes and voting rights are now allowed in Hong Kong. This is a set up that is utilized by smartphone company Xiaomi and Internet company Meituan Dianping.