Chinese lion statue at Victoria peak, the famous viewpoint and tourist attraction in Hong Kong Photo: VCG

Chinese e-commerce giant JD.com will debut at the Hong Kong stock market on Thursday. Shares of the No 2 e-commerce platform in China were over-subscribed by investors. 

Coronavirus-fuelled online purchases are expected to converge with strong investor interest in the NASDAQ-traded firm's secondary listing, which exemplifies a growing trend of home-coming among Chinese listed companies amid US regulatory toughening measures.

The retail portion of JD.com's Hong Kong offering was over-subscribed 177.9 times, meaning retail investors who subscribed to 40 board lots of the new shares may on average get one board lot, the local newspaper the Standard reported Wednesday.

The online retailer, Alibaba's smaller rival, reportedly raised HK$29.77 billion ($3.84 billion) after pricing its IPO at HK$226 apiece.

JD.com's debut on the Hong Kong bourse comes after Chinese online gaming firm NetEase's secondary offering in the city last week. 

Another fresh example of an apparent rush among US-listed Chinese firms to sell shares in the Hong Kong market was a potential listing in the city by Yum China.

NYSE-traded Yum China, the operator of KFC, Pizza Hut and Taco Bell restaurants in China, will sound out banks about a potential listing in Hong Kong, the Financial Times reported on Wednesday.

US investment bank Jefferies has identified 31 US-listed Chinese companies that could eventually pursue a listing in Hong Kong. The "listing emigration," according to Jefferies, could lure up to $557 billion to the city. 

According to another estimate, 42 Chinese companies trading in the US are eligible for a secondary listing in Hong Kong, accounting for 46 percent of the total capitalization of US-traded Chinese firms, China Business News reported last week, citing a financial industry analyst at UBS.

The Hong Kong exchange, with abundant liquidity, is capable of hosting the mainland-based companies, the analyst said. If the Hong Kong market becomes the gateway to invest in the mainland's new-economy upstarts, global asset managers will be willing to maintain their positions in them as they seek to relist in Hong Kong.

Other than relisting in Hong Kong, privatization is also an option for those planning to ditch their US listings.

NYSE-listed 58.com earlier this week signed an $8.7 billion take-private agreement with Quantum Bloom Group, the Chinese classifieds site said in a statement sent to the Global Times. 

The privatization deal is expected to be completed in the second half of the year. By then, 58.com will be privately held with its shares delisted from the US, read the statement.

While the Hong Kong market is likely to be mostly used by US-traded Chinese firms for secondary offerings, the nation's capital market at large would also get a boost from the home-coming trend, analysts say. 

The return of US-traded Chinese stocks offers convenience for Chinese mainland investors to hold stakes in Chinese internet majors, said Lu Yiqiao, associate researcher with Zhixin Investment Research Institute.

Previously, most domestic investors could only invest in the firms through funds under the Qualified Domestic Institutional Investor (QDII) program. However, the total assets of domestic QDII funds only accounts for less than 1 percent of that of mutual funds. 

With premium firms relisting in the mainland and Hong Kong markets, domestic investors would be able to access these firms, which have largely been out of reach, according to Lu, citing avenues including the A-share market, funds linked to Hong Kong shares and the stock link between the mainland and Hong Kong. 

In a sign of optimism for China's equity market, Laura Wang, chief China equity strategist at Morgan Stanley, recommended at an online press conference on Wednesday that global investors should increase holdings in Chinese A shares over the next six to 12 months.

Global Times