NetEase to have filed for second listing in Hong Kong

[HONG KONG] NetEase has filed confidentially for a second listing in Hong Kong, according to people familiar with the matter, joining other Chinese technology companies in tapping the city's stock market for new funds.

NetEase has held initial talks with advisers, the people said, asking not to be identified because the information is private. The share sale could happen as soon as the second half of this year, one of the people said. The Hangzhou-based online gaming and entertainment company, which currently trades on the Nasdaq, has a market value of about US$43 billion.

No final decision has been made on the details of the offering including size and timeline, the people said. A representative for NetEase declined to comment.

NetEase was among the Chinese firms that had discussed secondary listings with Hong Kong Exchanges & Clearing after Alibaba Group Holding raised US$13 billion in its 2019 secondary share sale, Bloomberg News reported in January. Chinese e-commerce giant JD.com has also filed confidentially for a second listing in the financial hub, people familiar with the matter have said.

Sales of mobile games are surging this year as coronavirus-driven lockdowns and other social distancing measures have led to more time and money spent on gaming, according to Bloomberg Intelligence analysts Matthew Kanterman and Vey-Sern Ling. Tencent Holdings and NetEase are the market leaders in iOS mobile games and the analysts expected the duo to maintain their leads. NetEase has a 6.1 per cent share of the category, according to analytics firm Sensor Tower.

Games developed by NetEase are among the most popular in China, including the hit titles Fantasy Westward Journey 3D and Knives Out. The company also operates international online games locally, such as Activision Blizzard's World of Warcraft. In addition to games, NetEase offers music streaming services and runs a private label e-commerce platform.

Shares of NetEase have risen 7.5 per cent this year, outperforming the 2.9 per cent decline in the Nasdaq Composite Index.

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