NetEase, the mainland's second-largest online game developer, is set to launch its secondary offering today to raise as much as HK$21.61 billion, the largest listing in Hong Kong so far this year, with a minimum investment of HK$12,726.97 per board lot of 100 shares.
The Nasdaq-listed company will price the flotation by Friday after the paperless initial public offering closes at noon that day. It is expected to start trading on the main board on June 11.
NetEase is offering 171.48 million shares at not more than HK$126 apiece, among which 5.15 million shares, or 3 percent of total new shares, are available to retail investors.
If the IPO's retail portion is heavily oversubscribed, Hong Kong stock exchange's "clawback mechanism" will enable retail investors to take up to 20.58 million new shares, or 12 percent of the deal.
The total raised from the deal could eventually reach as much as HK$24.85 billion if an over-allotment option for international underwriters is exercised.
CICC, Credit Suisse and JP Morgan are the joint sponsors and joint global coordinators for the public offering.
NetEase's float is expected to be one of several large secondary listings in the city this year, as rising tensions between the United States and China have caused Washington to question whether Chinese companies should be able to list in New York.
In its prospectus, the company said one potential risk for investors was the proposed US legislation that could force some Chinese companies to delist if their auditor had failed to comply with US audit oversight for three years.
NetEase is only the second company to launch a secondary listing in Hong Kong, following Alibaba (9988) in 2019, after a rule change in the city finally allowed US-listed Chinese groups to seek a secondary listing.
JD.com is expected to follow Netease, with plans to list on June 18 that could raise up to US$3 billion (HK$23.4 billion) by selling down 5 percent of its shares.
In other IPO news, Yeahka (9923), a Tencent (0700)-backed payment-based technology platform, rose 6.13 percent to HK$17.66 on its market debut yesterday, with a market turnover of HK$1.7 billion.
But new debutant SMC Electric (2381), a mainland electric tools and electric fans exporter, saw its share price fall by around 20 percent from its offer price of HK$0.25 in the gray markets last night.
Pix.
Sing tao
