Alibaba Heading for Hong Kong Share Sale This Month (Report)

Patrick Frater

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China’s e-commerce and entertainment giant Alibaba is understood to be back on track with a secondary listing of its shares in Hong Kong. The listing might also raise up to $15 billion of additional capital.

The group conducted a record breaking IPO in 2014 on the New York Stock Exchange and currently enjoys a market capitalization of $488 billion.

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A report by news agency Reuters, citing unnamed sources, Friday said that the sales process would likely begin in Hong Kong from Nov. 25. Contacted by Variety, Alibaba offered no comment.

From a political context, the share listing could be seen as a sign of a thaw in the U.S.-China trade war which has been damaging international trade for over a year now. It might also be seen as a vote of confidence in beleaguered Hong Kong, which has suffered from five months of disruptive civil protests against the city’s government and perceived influence from Beijing in the once free-wheeling city’s business and social affairs. Hong Kong returned to Chinese sovereignty in 1997 but has operated its own systems in matters including legal system, language and currency.)

Alibaba recently reported robust financial results. It beat market expectations with earnings per share of $1.83 in the second quarter of its financial year. The group also beat financial analysts’ expectations of its revenue, with a 40% year-on-year increase to RMB119 billion (US$16.7 billion).

Group profits in the three months from July to September were $9.90 billion (RMB70.7 billion) shown on the GAAP accounting standard and including gains from its stake in Ant Financial. Expressed in a non-GAAP fashion and without the one-off gains, profits in the quarter amounted to $4.58 billion (RMB32.8 billion), an increase of 40% year-over-year.

The healthy numbers were notably driven by a 64% increase in revenues for cloud computing, as China’s economy becomes increasingly digital.

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