As Ant Financial eyes HK, expect Alibaba halo to emerge

Ant Financial’s planned Hong Kong listing is just one of many jumbo deals that could land on the bourse this year. But few issuers will have such a clear path to success. The Alibaba halo should not be underestimated.

  • By Jonathan Breen
  • 22 Jan 2020
Email a colleague
Request a PDF


Alibaba Group Holding’s $11.3bn secondary listing in Hong Kong last November has spurred other companies to consider IPOs in the city, including secondary offerings from China’s other US-listed flagship technology firms.

Most prominent is talk of a flotation by Ant Financial Services Group, operator of online payment service Alipay. The Alibaba partner is expected to raise a multi-billion-dollar IPO while aiming for a market capitalisation as high as $200bn. When it does finally turn up, there is little doubt of its success.

China’s e-commerce giant has also had an effect on companies outside of its group. Much to the excitement of Hong Kong’s capital markets, there are reports of China’s other US-listed big hitters considering secondary listings on the HKEX.

Names such as Baidu, Ctrip, JD.com and NetEase are discussing potential Hong Kong offerings with investment banks. In China’s tech sector, these companies are huge names in their own right. However, they cannot expect the same reception as their larger peer.

Alibaba is rooted in tech but is increasingly seen as a consumer stock. Its American Depository Shares (ADS) are often treated as proxy exposure to the Chinese economy.

In the minds of investors, the company arguably enjoys the strength of China but comes without any of the multitude of its geopolitical and economic problems. The country’s leaders have largely given the nod to Alibaba’s winning model, even wanting a piece of the action for themselves. The government placed a chunky order for the company’s secondary IPO through the sovereign wealth fund.

Alibaba launched its Hong Kong listing despite a sudden resurgence in local protests and came out successfully, boosting the benchmark Hang Seng Index with it. Those following, from Baidu through to NetEase, do not carry the same clout.

Baidu, China’s answer to Google, has seen its stock price fall around 13% over the past year, putting its market cap at near $48.7bn. Alibaba’s ADS has risen by almost 50% across the same period, valuing the company at around $610bn.

China’s biggest tech firms chose to list in the US at least in part because they could issue dual-class shares. Alibaba floated for $25bn in 2014 on the New York Stock Exchange with weighted voting rights shares. It passed over Hong Kong because the bourse wouldn’t allow it to use a WVR structure.

The HKEX finally succumbed and in April 2018 added a chapter to its regulations allowing technology companies to float dual class shares. The move, which the exchange hoped would inspire a flurry of WVR offerings and dual-listings by US-traded Chinese firms, did not take off as quickly as expected. Alibaba’s secondary offering was only the third to include dual-class shares.

The e-commerce firm has done Hong Kong a service, leading the way and allowing China’s other national champions to follow. But those firms will be followers for a reason. Look for the Alibaba halo to be a clear pricing differentiator in the coming years.


  • By Jonathan Breen
  • 22 Jan 2020

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 Bank of China (BOC) 18.86
2 Industrial and Commercial Bank of China (ICBC) 14.39
3 China Merchants Bank Co 14.21
4 China Merchants Securities Co 8.85
5 Agricultural Bank of China (ABC) 5.90

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 China International Capital Corp Ltd 4.57 23 12.74%
2 China Securities Co Ltd 3.53 7 9.84%
3 Morgan Stanley 3.39 11 9.44%
4 CITIC Securities 3.29 11 9.18%
5 Goldman Sachs 1.70 13 4.75%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Citi 7.00 39 7.75%
2 HSBC 5.95 51 6.59%
3 UBS 4.45 28 4.93%
4 BofA Securities 4.36 17 4.82%
5 JPMorgan 4.08 27 4.52%

Asian polls & awards

  • GlobalCapital China 2019 awards winners: Part III

    In the final part of GlobalCapital China’s awards announcement, we discuss the key innovation of 2019, and reveal the individual that has made the greatest contribution to reforming and internationalising the Chinese onshore market.

  • GlobalCapital China 2019 awards winners: Part II

    In the second part of GlobalCapital China’s awards announcement, we reveal the winning banks across Panda bonds, G3 bonds and ABS, as well as the best bank for securities services and the most impressive law firm.

  • GlobalCapital Asia capital markets awards 2019: Investment banks

    In the fourth and final instalment of GlobalCapital Asia’s capital markets awards announcements, find out which firms have been named the Best Asian Investment Bank and the Best Investment Bank in the region for 2019.

  • GlobalCapital China announces 2019 awards winners: Part I

    GlobalCapital China, previously GlobalRMB, is pleased to announce the winners of its annual capital markets awards, honouring the banks, companies and individuals that have made the biggest contribution to bridging the gap between China’s markets and the rest of the world. In part one of the awards, we reveal the most impressive issuers in the FIG, corporate and SSA categories.

  • GlobalCapital Asia capital markets awards 2019: Bonds

    In part three of GlobalCapital Asia's awards results announcements, we reveal the winning bond deals across a variety of categories. In addition, we also name the Best G3 Bond House, Best High Yield Bond House and the winner of the Best House for SRI Financing.