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IPO sez me: Alibaba looking to raise a cool $20bn for second listing on Hong Kong exchange

Chinese giant wants insurance policy in Trumpulent times

Alibaba is mulling a massive secondary share offer in Hong Kong, according to reports.

The largest public cloud provider in Asia and e-commerce behemoth is already listed in New York with a market cap of $400bn.

The company could file as soon as the second half of this year, Bloomberg reported.

The news comes at a difficult time for Chinese firms with continued confusion over US efforts to force the Middle Kingdom back into trade talks. Alibaba shares in New York have fallen sharply in recent weeks thanks to the row over Huawei and continued pressure on Chinese technology firms.

By listing on the Hong Kong exchange, the company would diversify its funding and potentially protect itself from whatever Trump's administration decides to do next. The move would also provide a decent-sized fund for acquisitions or to protect its business from US restrictions on supplies.

For the quarter ended 31 March, Alibaba recorded revenues of $13.9bn, up 51 per cent on last year, and profits of $4bn. It has 654 million active users. Revenue for the year was $56bn, also up 51 per cent.

The company was started by Jack Ma in 1999 with a focus on B2B e-commerce and initially provided an easy way for Chinese manufacturers to reach US and European customers, and for those companies to source Chinese manufacturers. But it has since branched out into consumer sales, back-office services for traditional retailers, food delivery and cloud computing.

Alibaba's cloud computing division grew 76 per cent to $1.151bn in its Q4 ended 31 March 2019. Gartner reckons that makes it the biggest provider in Asia with 19.6 per cent of the market, ahead of Amazon on 11 per cent. All of which, the analyst said, places Alibaba as the fourth-largest cloud provider in the world. ®

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