Big Expectations for Alibaba’s IPO in Hong Kong

There is growing expectation of an Alibaba IPO in Hong Kong which could raise as much as US$20 billion.

The plan, if it proceeds, would be the sixth-biggest follow-on share sale in history and succeed the firm’s $25 billion New York float of 2014. It is likely to fuel a renewed surge in technology investment for the firm at a time of escalating trade war between China and the US.

Spokespeople for the company have refused to provide further information on the tentative deal, which would allow investors in Hong Kong direct access to the Chinese e-commerce behemoth for the first time.

However, there have been widespread media reports of an Alibaba IPO in Hong Kong from reputable media, with the story originally broken by Reuters.

Alibaba was previously precluded from a Hong Kong listing due to its rules governing board appointments, however, the Hong Kong exchange has since relaxed its regulations.

The firm’s direct competitor Tencent Holdings currently trades at 26 times expected earnings in Hong Kong, compared to Alibaba’s New York trading at 22 times expected levels.

Some onlookers have speculated that Alibaba is looking overseas in response to a perceived maxing out of its potential user base within the mainland.

Alibaba is expected to apply for a listing confidentially.