Secondary listing of JD in Hong Kong

category:Finance
 Secondary listing of JD in Hong Kong


On the first day of Jingdongs listing, the overall performance of the stock price was stable. After the high opening, it surged and fell back. On that day, the opening price was 239 Hong Kong dollars, the closing price was 234 Hong Kong dollars, the turnover was 7 billion yuan, the turnover rate was 22.4%, and the amplitude was 4.6%.

Jingdong issued 133 million shares at a price of HK $226 per share and raised about HK $29.771 billion in net funds, making it the largest IPO in Hong Kong in the year.

Tao Yifei, QDII fund manager of Haifutong fund company, told the economic observer that on the whole, the listing of JD in Hong Kong is very successful, and the market pays high attention to JD, so there are some short-term games are also very normal. On the whole, the return of China capital stock to Hong Kong stock market is basically successful. These companies themselves are very excellent. After going back to Hong Kong and listing, they can make a new choice for the funds that they were unable to invest in in in the past. Moreover, the company has successfully carried out financing, which is beneficial to the development of the company in the future. So the overall stock price performance is pretty good.

Previous announcement shows that JD IPO subscription is hot. In the case of high total fundraising, the subscription ratio is still as high as 178.9 times, and the maximum 12% call back is initiated, and the signing rate of retail investors is only 10%.

Compared with the fervent enthusiasm for subscription, the data of Huasheng Securities Research Report shows that for many investors, they may think that the first days increase of Jingdongs IPO in Hong Kong is a little too low. Under such a low winning rate, the first-hand yield is only about 400 Hong Kong dollars. At the same time, because there are many Hong Kong stock subscription investors using margin financing (i.e. leverage financing) for subscription, this means that the cost of new investment will be higher and the income will be lower.

Analysts of futu securities told reporters that JDs stock price on the first day of listing in Hong Kong was in reasonable expectation, some of which fell or were affected by the sentiment of winning investors. It fluctuated a lot in the first ten minutes after the opening, but only slightly until the closing.

How do institutional investors consider whether to buy Jingdong or not?

Sun Jianbo, general manager of Zhongyue capital, told reporters that it is optimistic about Jingdong, but has not yet bought it, and intends to wait for the callback to buy it again. Jingdong has a market value of more than 90 billion US dollars in the United States and about 730 billion Hong Kong dollars in Hong Kong, which is 7% - 8% more expensive than American shares. The main reason is that the investors in the two markets are different. In recent years, Jingdongs utilization rate and penetration rate are very high, which are well recognized in China. Domestic investors also know Jingdong better than American investors. If the price difference is taken into account, American stocks are more cost-effective, but Hong Kong stocks are more convenient to trade, and the cost is lower, which to some extent makes up for this difference.

An institutional person close to Jingdong told reporters that in terms of share price, Jingdongs shares in the U.S. have risen about 70% this year. Many investors cant lock in the earnings when buying at this time, so they will also hold a wait-and-see attitude.

In the opening of the prospectus, Jingdong stressed that the company is transforming from a technology driven e-commerce company to a technology and service enterprise based on the supply chain. The groups net income in 2017, 2018 and 2019 respectively reached rmb362.3 billion (the same below), rmb462 billion and rmb576.9 billion. The net loss of continuing business in 2017 and 2018 was 19 million yuan and 2.801 billion yuan respectively, while the net profit of continuing business in 2019 was 11.89 billion yuan.

Because of this, more and more investors tend to think that Alibaba and JD belong to different business models when comparing them. The above institutions believe that the listing is Jingdong platform, emphasizing that they are a technical service provider, not just an e-commerce platform. In addition, there are Jingdong digital technology and Jingdong logistics in the unlisted part, and Jingdong still has certain imagination space in the future.

According to wind data, Alibabas price earnings ratio (TTM) is 28.6 times, and JDs price earnings ratio (TTM) is 111 times. From 2017 to 2019, Alibabas revenue was 158.3 billion yuan, 250.3 billion yuan and 376.8 billion yuan (the same below), operating profit was 60 billion yuan, 100.4 billion yuan and 96.2 billion yuan, and net profit was 41.2 billion yuan, 61.4 billion yuan and 80.2 billion yuan respectively.

Alibabas P / E ratio is nearly four times higher than Jingdongs, according to the analysts. But according to the financial report data, Alis income is similar to that of JD, and Ali has been profitable in the past three years. The different valuations given by investors to the two companies also reflect that the market has its own judgment on different business logic. At least in the last two years, the advantages of self built logistics of Jingdong are gradually emerging.

As for business logic, sun Jianbo believes that its hard to draw a conclusion whether Alis model or JDs model is better. Although the price of the same thing purchased by consumers is the same, the platforms discount point for merchants is not the same. JDs merchant discount point is relatively high, so it will inevitably lose some merchants. From this single point of view, JDs service object will be relatively narrow, and Alis service object is very wide. However, JDs after-sales service is better than Taobaos. JD has joined the strong intervention of the platform, and Alis intervention to businesses is not much.

As for how to invest, sun Jianbos stock selection strategy is that the development of the head companies is common development. If you are optimistic about the industry trend, you can directly buy the leading companies in the industry.

Tao Yifei is also waiting for Jingdongs share price and said he will consider appropriate allocation at a suitable price in the future. Jingdong is an excellent company. In addition to benefiting from the development of e-commerce market in the future, the logistics of Jingdong is also very attractive. So in the long run, Jingdong is also a very worthy target.

Netease and Jingdong, both of which have recently been listed, have seen their share prices rise and fall on the first day of listing. Alibaba closed at HK $187.6 on its first day of listing, compared with 217.8 on June 18, a 16% increase over its first day of listing.

For the performance of the first day of the secondary listing of Zhongwei shares, pangming, director of macro and strategic research of Huaxing securities, analyzed to reporters that the performance of individual shares is not only related to the sentiment and confidence of the market for individual shares, but also to the overall situation of the market. Over the past week, Hong Kong stocks have been dragged down by worries about the second wave of epidemic in the global peripheral stock markets, and the overall situation of this market must be taken into account.

In fact, pangming believes that it is a good time for China probability shares to be listed in Hong Kong. The valuation of Hong Kongs Hang Seng index once fell below 10 times the P / E ratio. Now the valuation is slowly repairing, and the fluctuation of China US relations has been reflected in the current valuation. And the current market for a more stable social situation gives a higher price.

Looking at the global IPO Financing volume in the first half of the year, Hong Kong returned to the top three with the help of two returned super large medium-sized stocks. The top two are the Shanghai Stock Exchange and NASDAQ. More than half of the IPO of the Shanghai stock exchange comes from the science and technology innovation board, while NASDAQ has a lot of super large new stocks. In the future, the return of China equities is expected to support the performance of the primary market of Hong Kong stocks.

Wang Lixing, head of Huaxing capital investment banking business unit, said: the secondary listing of Jingdong group in Hong Kong is one of the landmark projects for the return of China capital to the home market, and it is expected that there will be more secondary listing and new share issuance activities in Hong Kong in the second half of the year.

As for the e-commerce sector, the risk of the second recurrence of the current epidemic continues to benefit the sector.

According to pangming, the online retail sales in May increased by 15.6% year on year, 5.8% higher than that in April. What this data reflects is that we have formed a certain consumption mode, because in fact, the epidemic situation was eased in May, but we can see that the online consumption is still increasing, so the online consumption mode formed in the process of epidemic game will also be one Long term transformation is good for e-commerce, new formats and new industries.

These targets have not been included in the land stock connect is also one of the important reasons. According to the latest revised laws and regulations of Shanghai Stock Exchange and Shenzhen Stock Exchange, the admission of individual stocks with different rights into Hong Kong stock connect must meet the conditions of six months after listing in Hong Kong and 20 trading days after, and the daily average market value is not less than Hong Kong dollars 20 billion, and the turnover is not less than 6 billion yuan.

Alibaba is expected to take in Hong Kong shares in the near future. Pangming believes that Ali has met the time requirements set by the exchange, and the market value and trading volume have already met the requirements. The reform measures of the mainland stock exchange also try to attract the second listing of new economy stocks in the mainland, so there is no so-called regulatory arbitrage reason to refuse Alibaba to be included in the Hong Kong stock connect. The inclusion of Alibaba will play an exemplary and supportive role in the second listing of general shares in Hong Kong.

Many of Hong Kongs institutional investors are international institutions, and foreign trading is more affected by the global stock market. If these are included in the Hong Kong stock exchange standard and the southbound funds can participate in it in depth, these stocks will be more affected by the perspective of mainland investment. Pangming said.

The incorporation of hshk will help to promote the re evaluation of the value of these companies. Mike Shiao, chief investment officer of Jingshun Asia (excluding Japan), said that in the long run, regulators may consider including companies that are listed twice in the list of stocks that Shanghai, Shenzhen and Hong Kong stock connect provides for southbound capital investment. Southbound capital has become an important source of liquidity in the Hong Kong market. The financial sector has always been a core area of the Hong Kong market, while most American ADRs are in the communications services and Consumer Discretionary industries. Earnings growth in these sectors is much stronger than in the financial sector, as they benefit from many of the structural growth drivers that underpin Chinas rebalancing. Judging from the performance of Hong Kong stock market in the first half of this year, under the overall downturn, the growth of new economy sector is significantly higher than that of traditional economy sector represented by finance and real estate. Analysts of futu securities believe that investors in Hong Kong are embracing new economic companies, whether its the hot pursuit from Alibaba, Jingdong and Netease when they offer shares in Hong Kong or the turnover of new economic companies. Source: Yang Qian, editor in charge of Economic Observer_ NF4425

The incorporation of hshk will help to promote the re evaluation of the value of these companies. Mike Shiao, chief investment officer of Jingshun Asia (excluding Japan), said that in the long run, regulators may consider including the companies listed twice in the stock list of Shanghai, Shenzhen and Hong Kong stock connect for investment in southbound funds. Southbound capital has become an important source of liquidity in the Hong Kong market. The financial sector has always been a core area of the Hong Kong market, while most American ADRs are in the communications services and Consumer Discretionary industries. Earnings growth in these sectors is much stronger than in the financial sector, as they benefit from many of the structural growth drivers that underpin Chinas rebalancing.