Alibaba Is Still Open to China Listing So Long as Rules Are Right

Xu Wei

(Yicai Global) March 16 — “We said on the day we sought a United States listing that we will come back as long as circumstances permit,” state-backed online news agency The Paper quoted China’s largest e-commerce firm Alibaba Group Holding Ltd. as saying in response to reports it is planning to list on the domestic market. “That thought has never changed.”

Alibaba went public in New York more than three years ago, but is working on a plan to list on a Chinese exchange, the Wall Street Journal reported, quoting people in the know. The Hangzhou-based e-tail giant is evaluating how its shares will be traded on a domestic exchange, a source said. Another insider said it could list as early as this summer if China’s securities laws are changed to allow a listing by a foreign company.

The firm’s initial public offering was the United States’ biggest ever in September 2014. It operates a variable interest entity structure, where an investor holds a controlling stake not based on the majority of voting rights. The bulk of Alibaba’s operations are in China, but its New York-listed unit is registered in the Cayman Islands.

China’s securities regulator has been looking into ways it can convince tech titans like Alibaba and Tencent Holdings Ltd. to list in their home market. It said recently that it has set up an expert panel to study rules that could bring in companies with new technologies or business structures, and several companies, including Alibaba’s lead rival JD.Com Inc., have said they would be happy to list in the right environment.

There are some 100 startups worth over USD1 billion, known as unicorns, in China, and the commission hopes to make IPOs easier to get them onto stock exchanges. The Shanghai bourse said yesterday that it will look to make more quality listings this year and provide services to help unicorns go public.