Netease intends to raise $ 2 to $ 3 billion in Hong Kong listing

HONG KONG (Reuters) – Chinese technology group Netease Inc. plans to raise between $ 2 and $ 3 billion in one of the largest equity deals so far this year, when it launches a secondary listing in Hong Kong on Monday, said three people familiar with the transaction.

The Chinese online gaming company's offering is expected to be one of several major secondary listings in the city this year, as growing tension between the United States and China has led Washington to question whether Chinese companies should be able to list in New York. .

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Netease will begin construction of the institutional book on Monday and the retail offering will continue until the end of the week, sources told Reuters. They asked not to be identified as the information was not released.

Netease declined to comment on the listing process.

In his records for the Hong Kong Stock Exchange, Netease said that a potential risk to investors was the proposed US legislation that could force some Chinese companies off the list if their auditor did not comply with US audit oversight for three years. years.

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Netease is only the second company to launch a secondary listing in Hong Kong, after Alibaba in 2019, under a rule change in the city that finally allowed Chinese groups listed in the U.S. to seek a secondary listing.

JD.com is expected to follow Netease, with plans to list on June 18 and could raise up to $ 3 billion from the sale of 5% of its shares, Reuters reported.

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The Netease deal will be Hong Kong's longest list so far in 2020, according to Refinitiv data, and one of the largest in the world, depending on the final size.

This occurs when market activity is growing again globally. On Friday, the JDE Peet coffee maker raised 2.25 billion euros ($ 2.50 billion) in its Amsterdam debut, while Warner Music is expected to price its offer of up to $ 1.8 billion in New York on Tuesday.

Earlier this year, Asia had hosted the biggest deals, with the Beijing-Shanghai High Speed ​​Railway raising $ 4.4 billion in China in early January and Thailand's Central Retail receiving $ 2.52 billion in February. in Bangkok.

Companies have raised $ 36.9 billion in IPOs so far this year, a 32.1% drop from the same period last year, Refinitiv data showed.

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Reporting by Scott Murdoch, Kane Wu and Julie Zhu; Editing by Jennifer Hughes and William Mallard

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