Report
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I have covered some aspects of the deal in my earlier notes: Alibaba IPO/​Secondary Listing - The Real IPO Only Begins on the 11th Day Post Listing, Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works, and Alibaba IPO/​Secondary Listing - What does one need to do with the US ADR while waiting for the HK listing?
In relative terms, the deal is small considering Baba’s market cap, the number of shares that will be issued and the deal size versus average daily volume. Even on the fundamental front, the deal is unlikely to change anything for the company.
The most curious aspect of the deal is the lack of a price range. In my view, a definitive price range would have been more supportive of the ADR trading while the book build was on. The lack of a price range might mean that the ADRs continue to languish.
Alibaba IPO/Secondary Listing - Not good for the ADR, should have put a price range to it
Alibaba Group Holding (BABA US) plans to raise around US$13bn (including over-allocation) via a secondary listing in Hong Kong.I have covered some aspects of the deal in my earlier notes: Alibaba IPO/​Secondary Listing - The Real IPO Only Begins on the 11th Day Post Listing, Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works, and Alibaba IPO/​Secondary Listing - What does one need to do with the US ADR while waiting for the HK listing?
In relative terms, the deal is small considering Baba’s market cap, the number of shares that will be issued and the deal size versus average daily volume. Even on the fundamental front, the deal is unlikely to change anything for the company.
The most curious aspect of the deal is the lack of a price range. In my view, a definitive price range would have been more supportive of the ADR trading while the book build was on. The lack of a price range might mean that the ADRs continue to languish.
Underlying
Alibaba Group Holding Ltd. Sponsored ADR
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Sumeet Singh
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