NetEase’s shares jumped more than 6% in their trading debut in Hong Kong on Thursday, in a sign of investors’ strong interest in the gaming giant, the second major U.S.-listed Chinese tech company after Alibaba to do a secondary listing in the financial hub.
Shares opened at HK$133 ($17) each, more than 8% higher than the offering price of HK$123 NetEase set over the weekend.
NetEase, which went public on Nasdaq in 2000, issued about 171 million new ordinary shares in an effort to raise HK$21.09 billion, which will be used to bankroll global expansion, pursue innovation and for general corporate purposes.
Affected by the Covid-19 pandemic, the Guangzhou-based company held a virtual bell ringing ceremony, where NetEase founder and CEO Ding Lei hailed the Hong Kong listing as a “new start” for the company. “We will bring more value to our massive number of users by persistently gathering strength from people, passion and innovation,” he said.
NetEase got a lot of love from Hong Kong’s retail investors, being oversubscribed by a massive 360 times prior to Thursday’s trading.
The company’s move to list in Hong Kong comes as the U.S. is seeking legislation that may lead to the delisting of Chinese companies from American stock exchanges.
In May, the U.S. Senate cleared the Holding Foreign Companies Accountable Bill, which may ban a company’s securities from U.S. bourses if the Public Company Accounting Oversight Board is unable to conduct an audit for three consecutive years. To go into effect, the measure needs approval by the House of Representatives and the signature of President Donald Trump.
The potential risks of the bill were highlighted in a stock filing by Nasdaq-traded Chinese e-commerce giant JD.com, which is also making preparations for a secondary listing in Hong Kong, which is expected to raise as much as HK$31.4 billion.
Liu Yanfei contributed to this report.
Contact reporter Ding Yi (firstname.lastname@example.org)