24 September 2018
Alibaba may seek to capitalize on the recent positive investor sentiment towards China internet IPOs. Photo: Bloomberg
Alibaba may seek to capitalize on the recent positive investor sentiment towards China internet IPOs. Photo: Bloomberg

New life for Alibaba, Jingdong IPOs?

A series of moves surrounding leading e-commerce firms Alibaba and Jingdong is prompting speculation that the pair could be accelerating towards highly anticipated IPOs that had got stalled earlier for different reasons. Alibaba wants desperately to list in Hong Kong, but was thwarted after a disagreement with local regulators. Now media reports are speculating that a recent personnel move involving one of those regulators could breathe new life into the Hong Kong listing plan. Jingdong, meantime, tried to launch an IPO last year but failed due to lack of investor interest. Now, media reports say the company is on the cusp of a major acquisition, indicating it may be trying to raise its profile as it prepares for another IPO attempt.

I should start by saying that it is highly unlikely that either of these companies will be able to list before next March at the earliest. All signals indicate that neither has hired an investment bank for an IPO, and any offering typically won’t come until six weeks to two months after that. And since companies rarely make offerings in the period between Christmas and Chinese New Year, it’s unlikely we’ll see anything from either company until at least the second quarter of next year.

But all that said, the latest developments do look interesting as they could indicate that one or both companies want to move forward quickly to take advantage of a recent window of positive investor sentiment towards China Internet IPOs. Let’s start with Alibaba, which has clashed with Hong Kong securities regulators since the summer. Alibaba wants Hong Kong to approve a partnership structure that would allow control of the company to stay in the hands of a small group of top managers, even though such a structure violates Hong Kong listing rules.

In a new move that may or may not be related to the matter, veteran dealmaker Mary Ma left the Hong Kong stock exchange’s listing committee last week, and has taken up a place as a non-executive director of the Securities and Futures Commission (SFC), the city’s securities regulator. At least one Chinese media outlet is speculating that the move could suggest a compromise is coming that would allow Alibaba to list in Hong Kong.

I’m quite familiar with Ma from her days as CFO of Lenovo (HKEx: 992), and then later as an executive at private-equity firm TPG. I’ll admit I’m less familiar with the politics of the Hong Kong stock exchange and SFC, though Ma’s move does look potentially significant. Media had already reported last month that Alibaba and Hong Kong were moving towards a compromise that would let the Chinese e-commerce group to list in Hong Kong. I believe that Alibaba will ultimately list in Hong Kong because both sides really want such an outcome, and this latest move by Ma could indicate things are moving in that direction.

From Alibaba let’s turn quickly to Jingdong, whose outspoken founder Liu Qiangdong has been surprisingly quiet over the last year following a failed IPO attempt. The company could be preparing to jump back into the spotlight with word that it’s near a deal to pay US$700 million for MediaV, a marketing and advertising company. This deal would certainly be a big one for Jingdong, which is either still losing money or may have turned slightly profitable this year.

Jingdong reportedly made an IPO attempt last year to replenish its fast-dwindling cash pot, but then managed to raise US$400 million in new private funding this year after the IPO attempt failed. If this new acquisition is really happening, that would quickly exhaust all of Jingdong’s new funding, re-raising the imperative for an IPO to get more money. We’ll have to wait and see what happens, but if the new acquisition really takes place I wouldn’t be surprised to see Jingdong re-launch its IPO in the first half of 2014.

Bottom line: New signals indicate Alibaba and Jingdong may be moving forward with IPO plans, with the former likely to list in Hong Kong and the latter in New York as early as the first half of 2014.



A commentator on China company news and associate professor in the journalism department of Fudan University in Shanghai. Follow him on his blog at

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