Alibaba strikes gong in Hong Kong
Alibaba Group’s Hong Kong shares opened up 7.7 percent higher than its offering price and closed at HK$187.6 (US$23.9) on Tuesday after it completed the city's biggest IPO in nearly a decade.
“I want to especially thank Hong Kong and the Hong Kong Stock Exchange. As a result of the continuous innovation and changes to the Hong Kong capital market, we are able to realize what we regrettably missed out on five years ago," said CEO and Chairman Daniel Zhang.
"Today, we realized what we said then: ‘When conditions allow, we will come back to Hong Kong',"he noted.
"Through the development of the Internet and digital economy, we have been granted the opportunity to fulfill our founding mission ‘to make it easy to do business anywhere’. "
Alibaba went to New York for its US$25 billion IPO in 2014 as the Hong Kong bourse at that time excluded the listing of companies with weighted voting rights.
Each American depositary share (ADS) on the New York Stock Exchange is worth eight Hong Kong shares and will be fully fungible.
China Investment Securities HK analyst Allen Wong said that given retail investors' enthusiasm, it might be a good chance to cash in on the initial boost in the short term.
"But investors might have to wait till the third quarter next year for Alibaba shares to be included in the Stock Connect scheme and as more ADS are likely to be transferred into Hong Kong shares in the process, the prices would be rather close in the long run," he added.
Ten customers and partners from eight countries were invited to strike the gong to mark the start of Alibaba’s official trading on Hong Kong Stock Exchange Market, underscoring the globalization of the Alibaba digital economy.
The e-commerce giant wants to expand into other digital affiliates and said the proceeds will be used for investment in delivery and local lifestyle services unit Ele.me and online travel site Fliggy.
Macquarie also wrote in a research note that Alibaba would maintain strong revenue momentum in the future as it continues to benefit from a strong digital ecosystem to retain customers and activate potential buyers and it sets a target price of HK$224.