More Chinese technology companies might follow in Alibaba’s footsteps and list in Hong Kong, likely boosting the sector as well as the city’s stock exchange.
A higher valuation is one big draw. An investor base more familiar with their names could be more willing to give them higher valuations. A case in point for this expectation: Shares in U.S.-listed online travel company Trip.com and game company NetEase, which make most of their revenue in China, both jumped after Bloomberg reported Thursday that they are in talks with the Hong Kong bourse about secondary listings.
Thanks to Hong Kong’s trading link with China’s exchanges in Shanghai and Shenzhen, it attracts increasing volumes of money from mainland investors as well as global money managers and its own affluent population. Online-delivery leader Meituan Dianping, which had just turned into profit for two quarters, saw its shares rise 132% in 2019, making it the third most valuable Chinese internet stock. Alibaba has been hitting all-time highs after its secondary listing, closing its valuation gap with Hong Kong-listed Tencent. Alibaba doesn’t yet qualify for Hong Kong’s link with mainland exchanges, but likely will later this year.
Secondary listings also are a good way for companies to diversify their funding sources as relations between China and the U.S. have been deteriorating. Politicians in Washington have been floating various proposals to impose greater scrutiny on U.S.-listed Chinese companies.
The other beneficiary of these potential deals is Hong Kong Exchanges & Clearing, the city’s stock-exchange operator. Thanks to Alibaba, Hong Kong attracted $40 billion of capital from new listings last year, ahead of Nasdaq and the New York Stock Exchange, according to Dealogic. The Hong Kong exchange’s stock is now trading at 32.7 times forward earnings, below the five-year average but still ahead of global peers. Exposure to China has long earned it a premium.
Political unrest in Hong Kong may continue this year, but that won’t stop the city becoming a magnet for Chinese technology companies.
Write to Jacky Wong at JACKY.WONG@wsj.com
Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
2020-01-06 10:30:00Z
https://www.wsj.com/articles/why-hong-kong-is-becoming-a-tech-hub-11578306603
CAIiEKrZUtfL_Hfo-_M3OY_EaX4qGAgEKg8IACoHCAow1tzJATDnyxUwiqe0AQ
Bagikan Berita Ini
0 Response to "Why Hong Kong Is Becoming a Tech Hub - Wall Street Journal"
Post a Comment