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By Scott Murdoch and Donny Kwok
HONG KONG (Reuters) – Bilibili Inc, which is backed by Alibaba Group, closed 1% below its quote price on Monday when it debuted in Hong Kong as analysts said a U.S. regulatory crackdown on Foreign listed companies had generated enthusiasm for the Chinese online video site. .
It was the city’s worst start in six months with a major stock quote. Bilibili debuted down 2.2% and fell 6.7% before recovering to close at HK $ 800 apiece.
The company has raised HK $ 20.2 billion ($ 2.6 billion) after valuing the shares at HK $ 808 last week.
Bilibili’s decline topped the Hong Kong Hang Seng Index which closed down 0.07%. Tech index <.HSTECH> was sold by 1.8%.
Bilibili was the eighth most actively traded in terms of turnover on Monday in Hong Kong with $ 331.42 million in shares changing hands.
The start is the worst of a major deal in Hong Kong since shares of Yum China Holdings Inc closed down 5.3% in September after raising $ 2 billion, according to data from Refinitiv.
Aequitas Research Director Sumeet Singh, who posts on Smartkarma, said the decline in Bilibili’s share was linked to an ongoing sale in most Chinese companies listed in the United States as a result of the decision of the Securities and Exchange Commission (SEC) to advance plans to delist foreign companies. that do not meet US auditing standards.
“Bilibili’s ADR appears to have been caught in the correction that caused ADRs to trade below the Hong Kong secondary quote price,” he said. Bilibili’s ADRs are down 8.4% since the SEC broke the news last week.
One share of Bilibili Hong Kong is equal to one of its American Depositary shares, according to documents filed by the company, which analysts say closely relates to the performance of the company’s share price on two scholarships.
Bilibili sold 25 million shares in the Hong Kong offering and its filings show that Alibaba has bought more than a third of the offered shares, bringing its stake to 8.2% of the company.
There have been around $ 25 billion in secondary registrations in Hong Kong since the start of 2020, according to Refinitiv.
Mandy Zhu, head of the world bank at UBS, China, said the number of so-called “home listings” would continue to rise in Hong Kong. The Swiss bank was a co-sponsor of the Bilibili listing in Hong Kong.
“The advantages of a secondary listing in Hong Kong include a relatively manageable regulatory process and timeline, the ability to attract more investors from mainland China and Hong Kong as well as an efficient capital raising process,” said declared Zhu
“Given the current uncertainty in the Sino-US environment, a secondary listing in Hong Kong could also represent an additional layer of funding channel.”
(1 USD = 7.7738 Hong Kong dollars)
(Reporting by Scott Murdoch and Donny Kwok in Hong Kong; Editing by Christopher Cushing and Muralikumar Anantharaman, editing by Louise Heavens)
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