Chinese e-commerce giant JD.com (京東) leaped nearly 6 percent on its Hong Kong debut yesterday after raising almost US$4 billion in an initial public offering (IPO) that was the world’s second-biggest this year.
The firm, which listed on the NASDAQ in New York in 2014, opened at HK$239 in early morning trading in Hong Kong, compared with its listing price of HK$226.
The new debut comes as Chinese companies — especially those in tech — eschew Wall Street because of rising tensions between Washington and Beijing.
Photo: AP
The crash of once-booming coffee chain Luckin Coffee Inc (瑞幸咖啡) following an accounting scandal has also increased concerns among overseas investors about the transparency and reliability of some Chinese companies.
However, New York’s loss has been Hong Kong’s gain.
Fellow Chinese tech giant NetEase (網易) raised US$2.7 billion in the territory earlier this month, capping a frenetic few weeks on the stock exchange, despite swirling fears over Beijing’s plan to impose national security legislation on the territory.
NetEase saw a similar 6 percent gain on its first day of trading.
“We have come to Hong Kong not just because we want to share our promise and development with more clients ... but because we have absolute confidence in China and the future of China’s economy,” JD chief executive officer of retail Xu Lei (徐雷) said at the opening ceremony.
The JD.com IPO is the second-largest globally this year after
Beijing-Shanghai High Speed Railway (京滬高鐵) raised US$4.3 billion in January, according to Bloomberg News.
The dual listing would help the company better compete with e-commerce rivals including Amazon.com Inc and Chinese titan Alibaba Group Holding Ltd (阿里巴巴), which raised US$12.9 billion in a secondary Hong Kong IPO last year.
Alibaba and JD dominate China’s online shopping industry, which has struggled during the COVID-19 pandemic.
A major test of Chinese consumer spending ended yesterday, with both firms wrapping up a major online sales bonanza, the first since the novel coronavirus emerged in central China late last year.
The annual “618” sale that runs for two weeks in June is the second-biggest discount period for Chinese retailers after “Singles Day,” which falls on Nov. 11. Both are similar to “Black Friday” in the US or Boxing Day sales in the UK.
While Hong Kong remains an attractive destination for listing, the territory is in a recession and facing political unrest, with pro-democracy protests raging for much of the past year.
Beijing has dismissed public anger as a foreign plot and has announced plans to impose anti-subversion law legislation on Hong Kong, which has some businesses worried that the territory might lose the autonomy from the mainland that has propelled its rise.
Beijing says that the legislation would stabilize the territory and reinforce confidence.
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