As for why it returned to Hong Kong for listing, Bloomberg said the aim was to diversify financing channels and increase liquidity, as well as to be closer to Chinese investors. It commented that this transaction may consolidate Hong Kongs position as a destination for listing Chinese technology stocks and boost Alibabas cash reserves as Alibaba and the US delegation commented on the take-out and tourism subsidy war.
According to wind data, the net cash flow generated by Alibabas business activities in fiscal year 2019 is 15.975 billion yuan, an increase of 20% over the previous year, while the net cash flow generated by investment activities in the same period is - 151.06 billion yuan; the net cash flow generated by business activities in the first quarter of 2019 is 18.553 billion yuan, and the net cash flow generated by investment activities is - 16.751 billion yuan.
If Alibaba returns to Hong Kong stock market smoothly, it will compete with Tencent, another big technology giant in China.
In April 2018, the Hong Kong Stock Exchange published a consultation summary on the listing system of emerging and innovative industry companies and revised the listing rules, which mainly involves three aspects: one is to allow companies with different rights to go to Hong Kong for listing; the other is to allow biotechnology companies with no profits and profits to go to Hong Kong for listing; and the third is to announce the criteria for innovative industry companies to regard Hong Kong as the second listing place.
Following that, Millet Science and Technology and Metro became the landing port exchange in July and September 2018, respectively. Other domestic technology giants have gone to Hong Kong to list in succession, which also refreshed the total amount of IPO raised by the Hong Kong Stock Exchange last year.
Alibaba Concept Stock Carnival
After the news of Alibabas return to Hong Kong stocks came out, a number of Alibaba concept stocks rose. Up to the close of June 13, Xinhua Capital and Sanjiang Shopping stopped, Junzheng Group rose 8.75%. Alibabas investment in Huayi Brothers, Qianfang Science and Technology, McLaren and so on all increased in varying degrees. As of the close, the Win Alibaba Concept Index was 1.58%.
From the current coverage of Ali concept stocks, including information technology, alternative consumption, industry, retail, health care, real estate, materials, and financial sectors.
According to wind data, Alibaba Concept Unit:
There are 27 companies in the information technology industry, covering a total market value of more than 520 billion yuan, including Haikang Video, Aerospace Information, Four-Dimensional Mapping, Qianfang Science and Technology, Weining Health, Weishitong, DongSoft Group, etc.
There are 14 optional consumer industries, covering a total market value of over 630 billion yuan, including SAIC Group, Qingdao Haier, Focus Media, McLaren, Wanda Film, Huashu Media, Visual China, Huayi Brothers, well-off shares, etc.
There are 5, 4 and 2 industries in industry, daily consumption and health care respectively. In addition, it covers a financial enterprise, Huatai Securities, which has a market value of more than 150 billion yuan.
These enterprises have been invested or cooperated by Ali in recent years. Especially in the first half of this year, Alis investment in listed companies accelerated.
In March, Ali subscribed to Shentong Logistics for 4.66 billion yuan, which had previously invested in Zhongtong Yuantong.
On May 15, Red Star McLaren announced that the companys controlling shareholder, Red Star Holdings, had successfully issued exchangeable bonds and was fully subscribed to by Alibaba for 4,359.4 billion yuan. If convertible bonds are swapped for shares, Alibaba will acquire A shares of Red Star McLaren, which account for about 10% of the total equity. Meanwhile, Ali acquired a 3.7% stake in Red Star McLaren in Hong Kong.
On May 27, Ali Networks invested 3.595 billion yuan to invest in Thousands of Technologies. After the transaction is completed, Ali Networks will become the second largest shareholder of Thousands of Technologies.
At the same time, a few days ago, the home of Wuhan Chinese businessmen landing on the A-share market was also an Ali investment. The data show that in February 2018, at a valuation of 36 billion yuan, the Home acquired strategic investment from Ali, Yunfeng Fund, Taikang Life, Garwauweiye and Joseph, with a total investment of 13 billion yuan. After this round of investment, Alibaba became the second largest shareholder of the Home.
On June 6, Alibaba submitted its annual report to the SEC (Securities and Exchange Commission of the United States) showing that Alibaba Groups revenue in fiscal year 2019 was 376.844 billion yuan ($56.152 billion), an increase of 50.58% over the previous year, and its net profit was 802.234 billion yuan ($11.955 billion), an increase of 30.65% over the previous year.
In addition, there are several noteworthy data. The annual sales and marketing expenditure of Alibaba Group in 2009 is 39.788 billion yuan ($5.928 billion), compared with 27.299 billion yuan in the previous fiscal year; operating profit is 57.844 billion yuan ($8.506 billion), compared with 69.314 billion yuan in the same period last year; interest and investment income (net value) is 44.106 billion yuan ($6.572 billion), compared with 30.494 billion in the same period last year. 95 million yuan.
At the same time, the report also disclosed Alis latest ownership structure, Ali executives and directorstotal shareholding fell to 9.3%. As of June 3, 2019, Chairman Ma Yun, Ali Executive Vice Chairman Cai Chongxin, Ali Executive Vice Chairman, owned 6.2%, Softbank Group 25.9% and Altaba 9.4%, all of which declined. Prior to that, both Softbank Group and Altaba had publicly stated that they would sell or liquidate their shares in Ali.
Alibaba has a long history with the HKEx
It is well known that Alibabas listing process has all the one in, one out origins with HKEx.
In 2007, Alibabas B2B business was listed in Hong Kong, which was also the business sector of Alibabas early start-up. At that time, the share price of Alibabas IPO rose nearly twice as much as HK$39.7 on the first day, but since then its share price has been declining. At that time, the macro-environment was not ideal after the outbreak of the global financial crisis. On the other hand, market analysts said that with Alibaba represented by C2C Taobao. The rapid rise of the electricity supplier form, and derived from Alipay, rookie network, Ali cloud and other sub Alibaba business that spreads all over the Alibaba ecosystem, soon surpassed the volume of B2B business that was initially launched. Considering many factors, Ali B2B chose to privatize and withdraw from the HKEx in 2012.
In 2013, Alibaba Group (all intra-group businesses including Taobao) sought to list in Hong Kong under a partnership system with different rights. But the Hong Kong Stock Exchange at that time did not have such a rule, nor could it reform rapidly in the short term, which was inconsistent with Alibabas management style. Eventually, Ali abandoned listing in Hong Kong.
In 2014, Alibaba went to the New York Stock Exchange and raised $25 billion, making it the largest IPO in the world. As of June 12, US Eastern Time, Alis total market capitalization was $414 billion, and Tencent, listed in Hong Kong, was among the top 10 companies in the global market capitalization list.
In April 2018, the new regulation of the Hong Kong Stock Exchange confirmed the new listing regulation of dual-equity companies, and millet became the first beneficiary. Subsequently, the delegation commented that more new economic companies were listed in Hong Kong.
In an interview with Finance and Economics a few months ago, Chairman Li Xiaoga of the Hong Kong Stock Exchange said that when Ali thought the Hong Kong market could solve its problems, it would come back. At present, it does not need financing or an additional trading place - unless it can bring new vitality. But Ali will come back 100 percent, its only a matter of time. At the inauguration ceremony of the Zhejiang Business Federation of Hong Kong in January last year, the Chief Executive of the Hong Kong Special Administrative Region, Lin Zhengyue-e, had a dialogue with Ma Yun, President of the Zhejiang Business Association and Chairman of the Alibaba Board of Directors, expressing Hong Kongs wish to embrace Alibaba. Ma Yun responded that he would seriously consider the Hong Kong market and hope to participate in making Hong Kong the second largest financial centre in the world. All these pave the way for Alibabas second listing in Hong Kong. Source: China Responsible Editor of Securities Dealers: Yang Bin_NF4368
In an interview with Finance and Economics a few months ago, Chairman Li Xiaoga of the Hong Kong Stock Exchange said that when Ali thought the Hong Kong market could solve its problems, it would come back. At present, it does not need financing or an additional trading place - unless it can bring new vitality. But Ali will come back 100 percent, its only a matter of time.
At the inauguration ceremony of the Zhejiang Business Federation of Hong Kong in January last year, the Chief Executive of the Hong Kong Special Administrative Region, Lin Zhengyue-e, had a dialogue with Ma Yun, President of the Zhejiang Business Association and Chairman of the Alibaba Board of Directors, expressing Hong Kongs wish to embrace Alibaba. Ma Yun responded that he would seriously consider the Hong Kong market and hope to participate in making Hong Kong the second largest financial centre in the world.
All these pave the way for Alibabas second listing in Hong Kong.