Report
EUR 88.49
For Business Accounts Only
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, and Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works
Since then the rules for the stock connect have been finalised but unfortunately they won’t have much impact on the listing as the inclusion into stock connect will only happen towards the middle of next year.
In relative terms, the deal is not big considering Baba’s market cap, the number of shares that will be issued and the deal size versus average daily volume. Even fundamentally, the deal is far from a game changer for the company and hence, is unlikely to be a big driver for the stock.
Although, the deal is likely to get some support from passive buying but given that is a secondary listing, it's not clear whether the buying will come for the HK listing or the US one.
Furthermore, looking at some of the past deals with similar characteristics implies that the deal will make single digit returns, at best.
Alibaba IPO/Secondary Listing - What does one need to do with the US ADR while waiting for the HK listing?
Alibaba Group Holding (BABA US) plans to raise around US$15bn later this month via a secondary listing in Hong Kong, as per media reports.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, and Alibaba IPO/​Secondary Listing - Proposed Stock Connect Changes Might Throw a Spanner in the Works
Since then the rules for the stock connect have been finalised but unfortunately they won’t have much impact on the listing as the inclusion into stock connect will only happen towards the middle of next year.
In relative terms, the deal is not big considering Baba’s market cap, the number of shares that will be issued and the deal size versus average daily volume. Even fundamentally, the deal is far from a game changer for the company and hence, is unlikely to be a big driver for the stock.
Although, the deal is likely to get some support from passive buying but given that is a secondary listing, it's not clear whether the buying will come for the HK listing or the US one.
Furthermore, looking at some of the past deals with similar characteristics implies that the deal will make single digit returns, at best.
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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