Trip.com, NetEase Stocks Skyrocket on Talks With Hong Kong Bourse

TCOM shares were up 10%, while NTES gained 7% on news that the two may follow in Alibaba's footsteps to the Stock Exchange of Hong Kong this year.
Capitalwatch StaffJan 02,2020,23:05

Trip.com Group Ltd. (Nasdaq: TCOM) and NetEase Inc. (Nasdaq: NTES) saw their stocks soar Thursday on news that they may pursue secondary listings this year.

Hong Kong Exchanges & Clearing Ltd. is in talks with mainland companies including the travel booking and game giants, as Bloomberg reported on Thursday, citing undisclosed sources.

The news comes as the United States turned Wall Street increasingly hostile for Chinese newcomers. Although there has been no lack of Chinese applicants to trade publicly in New York, some companies are considering other options. Bloomberg wrote the HKEX is seeing an influx of inquiries from mainland firms. 

In November, Alibaba (NYSE: BABA; HKEX: 9988) paved the way by celebrating a $13 billion offering despite the ongoing anti-government protests in the city. The offering was the largest in Hong Kong since 2010.

At the ceremony, its chairman and chief executive, Daniel Zhang, said Alibaba Group Holding Ltd. came home. Zhang also said, “It helped make up for our regret five years ago,” as cited by Caixin Global news agency.

The company raised $25 billion in its U.S. IPO in September 2014, now the world’s second-largest. Despite the initial success, the former chairman of the giant, legendary leader Jack Ma, has long called Alibaba’s stock “undervalued” by U.S. investors.  

Since its secondary offering in Hong Kong, Alibaba’s American depositary shares on Wall Street gained nearly $30 apiece. On Thursday, BABA shares closed at $219.77, nearly 4% higher on the day.

In the first quarter, Hang Seng Indexes Co. will discuss whether companies with weighted voting rights should be added to the benchmark Hang Seng Index, Bloomberg reported.

Trip.com, formerly Ctrip, and NetEase, together have a combined market value of $60 billion. As the Hong Kong bourse is luring back its tech titans to boost its economy in the face of ongoing protests, the year 2020 may see some significant China companies turn away from New York. Already in 2019, the Hong Kong capital market beat New York with $39.86 billion in total IPO funding, as Caixin reported.

The stock in Trip.com soared more than 10% on Thursday to $36.97 per ADS.

NetEase shares rose 7% to $328.77 apiece.

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