JD Is Going To List In Hong Kong Exchange With Over 100 times Oversubscription

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By :  ,  Financial Analyst

JD.com Is Going To List In Hong Kong Exchange With Over 100 times Over-subscription

JD.com, the No.2 online retailer in China, is going to start its secondary-listing in Hong Kong Exchange on June 18 to raise as much as HK$30 billion.

The media said the over-subscription of JD.com would be around 180 times as of June 11 and the company would set the IPO at HK$226. JD.com's ADR stock fell 5.7% to $57.24 yesterday, which converted to around HK$222.6, as the global market slumped on the fear of a second wave of coronavirus.

In fact, Chinese technology companies are interested to kick off its secondary-listing planning in Hong Kong Exchange as the U.S. Senate passed legislation that could restrict Chinese companies from listing on American exchanges or raise money from U.S. investors, unless they abide by Washington's regulatory and audit standards. 

Yesterday, NetEase started to trade on the Hong Kong Exchange with the closing prices at HK$130.2, higher than the IPO price around 5.8%.

Alibaba, JD.com's major competitor, is also listing in Hong Kong Exchange since November 2019. In 2020, the share prices of JD.com rose more than 60% year to date in the U.S. market, while Alibaba was just up around 1%. In the price action, JD.com is better than its competitor.

Recently, JD.com announced that its 1Q net income was 1.1 billion yuan, down from 7.3 billion yuan, on revenue of 146.2 billion yuan, up 20.7% on year.

On a daily chart, JD.com's ADR stock has recorded a series of higher tops and higher bottoms since March low, indicating a bullish outlook.

Currently, although the stock posted a pullback, it is still supported by the rising 20-day moving average.

Bullish readers could set the support level at $49.30 (the previous low), while the resistance levels would be located at $64.80 (100% measured move) and $74.3 (161.8% Fibonacci projection).

Source: GAIN Capital, TradingView
Related tags: Equities Tech Stocks China

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