What happened: As US government pressure has grown over the past few months, various US-listed Chinese companies have looked at the alternative of a secondary listing on Hong Kong’s stock market. Alibaba was the first to list in Hong Kong in 2019, and since then, news followed that the search-engine Baidu was considering delisting from the US Nasdaq. This June, Yum China Holdings filed for a confidential $2 billion Hong Kong IPO, while JD.com and the Nasdaq-listed NetEase both had stellar Hong Kong trading debuts. And now, sources say that Trip.com Group and the online discount retailer Vipshop are also considering secondary offers in Hong Kong.
Jing Take: Washington’s crackdown on US-listed Chinese companies will benefit Hong Kong at the right time, as the top international financial hub has been suffering due to ongoing protests, Beijing’s new national security rules, and the COVID-19 outbreak. Attracting and securing big IPOs would help Hong Kong reposition itself as a safe and stable financial market and will help it draw investor interest and Mainland money. But Beijing will also benefit from Sino-American tensions, as it will gain tighter control over these corporations while strengthening economic ties between the Mainland and Hong Kong. In the end, these moves will only make Hong Kong even more reliant on the Mainland.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.