Chinese e-commerce giant’s shares gain 5.7% in their Hong Kong debut

Chinese e-commerce giant’s shares rose 5.7% after opening at HKD $239 (about USD $30.80) during their first day of trading on the Hong Kong stock exchange. had originally priced the shares for the secondary offering at $226. issued 133 million new Class A ordinary shares as part of the secondary offering and said it expects its net proceeds to be about HKD 30.05 billion (or about $3.9 billion). Funds raised from the offering will be used to develop’s supply chain technology. The secondary offering’s underwriter can also opt to issue up to an additional 19.95 million new Class A ordinary shares, if there is demand, for 30 days after June 11. held its initial public offering on Nasdaq in 2015.’s U.S. shares closed up 1.7% in Wednesday trading. said its online sales increased during the coronavirus lockdowns in China earlier this year. During the first quarter of 2020, revenue grew 20.7% year over year.

The firm is undergoing a gradual leadership change, with retail head Xu Lei taking over responsibilities from founder and CEO Richard Liu, who was arrested two years ago in Minnesota on suspicion of rape. Though Liu was not charged, his accuser filed a lawsuit against him last year, which is still ongoing.

It is the third Chinese tech firm to hold a secondary offering on the Hong Kong stock exchange, after Alibaba last November and Netease earlier this month.

Several U.S.-listed Chinese companies are eyeing the Hong Kong stock market because Congress is currently considering a bill that would require foreign companies to follow U.S. auditing standards and financial regulations, and reveal if they are owned or controlled by a foreign government.

While the bill would apply to all overseas companies, it is targeted at China as part of the U.S.-China trade war, and could potentially force some to delist. Mainland Chinese companies listed in the United States are also under heavier scrutiny after Luckin Coffee was found to have overstated is sales by hundreds of millions of dollars.