Whether NetEase can compose stories about flowering old trees remains to be seen.
Editor’s note: This article comes from the WeChat public account “zinc scale” (ID: znkedu) < / a>.
Author / Chen Dengxin
Editor / She Qianwen
Second After going public, Alibaba’s market value has taken another step forward, attracting other Chinese stocks to try.
On May 5, 2020, foreign media reported that NetEase has secretly applied for a secondary listing in Hong Kong, China, raising a maximum of US $ 2 billion. It has selected CICC, Credit Suisse and JP Morgan to be responsible for the listing, and the fastest stock issuance It may be carried out in the second half of this year, but some people familiar with the matter revealed that details such as the scale of the issuance and timetable have not yet been finalized.
For this, Netease responded publicly: “No comment.”
According to the listing rules of the Hong Kong Stock Exchange, the threshold for secondary listing is as follows: First, it is listed in the United States and the United Kingdom; second, the market value is not less than 40 billion Hong Kong dollars. According to incomplete statistics, of the more than 200 Chinese stocks currently listed in the United States, nearly 20 have a market value of more than 40 billion Hong Kong dollars, of which Netease is impressively listed, with a current market value of 43.408 billion US dollars.
It can be seen that NetEase meets the requirements for complete secondary listing, and as an old Chinese Internet company, it also has an internal financing motivation: the game business needs to curb the decline in the domestic mobile game market share while opening up more overseas markets This is inseparable from the abundant “grass and grass” support; online education business is growing well, but the losses are also intensifying, it is necessary to continue high investment to be able to kill a bloody road from the crowded track.
From this perspective, the second listing of NetEase is not a catch.
The trust crisis in the Chinese stock market isfuse?
There is a voice that the crisis of trust in the Chinese stock market promotes the fuse of NetEase ’s secondary listing .
On the evening of April 2, 2020, Ruixing Coffee issued an announcement that after a preliminary investigation, it was found that the annual report of 2019 from the second quarter to the fourth quarter, the company ’s chief operating officer Liu Jian and others suspected of forging transactions of up to 2.2 billion yuan. .
Afterwards, Chinese stocks such as iQiyi, Good Future, and who to learn from have been short-sold by overseas institutions. For a while, the stocks have made the capital market talk change.
What fuels the fire is that the US Securities and Exchange Commission Chairman Jay Clayton said publicly on April 23: “Because of information disclosure, investors are reminded not to invest funds in the adjustment of positions in the near future. Stocks of Chinese companies listed in the US.
The remarks caused an uproar, and the stock price of the Chinese stocks was fully under pressure.
Jay Clayton
According to Wind statistics, from 2005 to 2019, 272 Chinese stocks were delisted and delisted from the United States, exceeding the total number of Chinese stocks that are still trading. More than 70% of the latter have fallen below the issue price The side confirms that the majority of Chinese stocks are not easy.
Under the storm, it is reasonable to speculate that the bottom stock will accelerate the escape, and the head stock may consider a secondary listing to share the risk.
However, this argument has also sufferedQuestioned.
“After the return of Alibaba to the Hong Kong Stock Exchange in November 2019, it was soon reported that the Chinese stocks such as JD.com and NetEase had the intention to return. At that time, there was no trust crisis in the Chinese stocks, and the timeline would not be right.” An Internet observer told Zinc Scale that the impact of the trust crisis in Chinese stocks is not ruled out, but this should not be the main reason. “Netease’s share price has not fallen compared with a month ago, and the fluctuations are within the normal range.”
It is undeniable that the stock prices of the stocks in the head are relatively strong, which means that investor confidence has not decayed.
“Compared with risk-sharing, raising market value and raising funds may be more important to NetEase. Market value measures the confidence of the capital market in the company ’s future, and it is also an important bargaining chip for the ranking of the Internet ’s rankings. Help NetEase to advance its focus strategy. “Said a private equity source.
Bida Consulting analyst Li Jinqing also agrees with this view: “Before, most Chinese Internet companies chose the US capital market because of their capital structure and profitability requirements. In fact, the main business of these companies is still in China, which makes it easy for overseas investment Are underestimated. “
The main business of the game needs to be consolidated
The funds raised may have to be invested in the main business of the game.
The NetEase Business Matrix covers mailboxes, games, portals, search, e-commerce, social networking, music, live streaming, reading, comics, blogs, photo albums, payment, financial management, online education and other fields.
It seems to be a self-contained system, but it is actually a little fat. Later, Netease CEO Ding Lei realized that “only staring at money will not make money.”
NetEase CEO Ding Lei
There is a voice that the crisis of trust in the Chinese stock market promotes the fuse of NetEase ’s secondary listing .
On the evening of April 2, 2020, Ruixing Coffee issued an announcement that after a preliminary investigation, it was found that the annual report of 2019 from the second quarter to the fourth quarter, the company ’s chief operating officer Liu Jian and others suspected of forging transactions of up to 2.2 billion yuan. .
Afterwards, Chinese stocks such as iQiyi, Good Future, and who to learn from have been short-sold by overseas institutions. For a while, the stocks have made the capital market talk change.
What fuels the fire is that the US Securities and Exchange Commission Chairman Jay Clayton said publicly on April 23: “Because of information disclosure, investors are reminded not to invest funds in the adjustment of positions in the near future. Stocks of Chinese companies listed in the US.
The remarks caused an uproar, and the stock price of the Chinese stocks was fully under pressure.
Jay Clayton
According to Wind statistics, from 2005 to 2019, 272 Chinese stocks were delisted and delisted from the United States, exceeding the total number of Chinese stocks that are still trading. More than 70% of the latter have fallen below the issue price The side confirms that the majority of Chinese stocks are not easy.
Under the storm, it is reasonable to speculate that the bottom stock will accelerate the escape, and the head stock may consider a secondary listing to share the risk.
However, this argument has also sufferedQuestioned.
“After the return of Alibaba to the Hong Kong Stock Exchange in November 2019, it was soon reported that the Chinese stocks such as JD.com and NetEase had the intention to return. At that time, there was no trust crisis in the Chinese stocks, and the timeline would not be right.” An Internet observer told Zinc Scale that the impact of the trust crisis in Chinese stocks is not ruled out, but this should not be the main reason. “Netease’s share price has not fallen compared with a month ago, and the fluctuations are within the normal range.”
It is undeniable that the stock prices of the stocks in the head are relatively strong, which means that investor confidence has not decayed.
“Compared with risk-sharing, raising market value and raising funds may be more important to NetEase. Market value measures the confidence of the capital market in the company ’s future, and it is also an important bargaining chip for the ranking of the Internet ’s rankings. Help NetEase to advance its focus strategy. “Said a private equity source.
Bida Consulting analyst Li Jinqing also agrees with this view: “Before, most Chinese Internet companies chose the US capital market because of their capital structure and profitability requirements. In fact, the main business of these companies is still in China, which makes it easy for overseas investment Are underestimated. “
The main business of the game needs to be consolidated
The funds raised may have to be invested in the main business of the game.
The NetEase Business Matrix covers mailboxes, games, portals, search, e-commerce, social networking, music, live streaming, reading, comics, blogs, photo albums, payment, financial management, online education and other fields.
It seems to be a self-contained system, but it is actually a little fat. Later, Netease CEO Ding Lei realized that “only staring at money will not make money.”
NetEase CEO Ding Lei