BABA is gearing up to return to Hong Kong's capital markets and is expected to list in the last week of November, raising between $10m and $15 billion, at a 4 per cent discount to BABA's current US shares, according to several media reports.

This is not only a major event for BABA, but also of great significance to the HKEx. Compared with the three major IPO of China Tower Corporation, Meituan and XIAOMI last year, the IPO market of the HKEx this year is quite light. The financing scale of BABA's "secondary listing" will not only boost the IPO market of Hong Kong stocks, but also prompt a large number of Chinese new economy companies listed in the United States to consider the Hong Kong Stock Exchange, such as Pinduoduo, JD.com, Baidu, Inc., and so on.

The main reason for accepting BABA's return is the reform of the listing rules of "different rights of the same share" implemented by the HKEx in 2018. BABA, who sought a Hong Kong listing, was shut out in 2013 because Hong Kong adhered to the principle of "one share, one right" and finally landed on the New York Stock Exchange in September 2014.

Six years after BABA and HKEx missed each other, the two sides renewed their relationship.

But BABA opened his Hong Kong capital market as early as 2007, when BABA was listed under the 1688.HK code and was privatized and delisted in 2012 for more than four years.

With BABA's "secondary listing" approaching, this past incident has once again attracted people's attention. Among them, the controversial issue is that the privatization price is the same as the IPO issue price, both HK $13.50, which is suspected of "cutting leeks".

But is that really the case?

A simple fact is: when BABA Group issued its privatization offer price of HK $13.50 on February 21, 2012, it represented a premium of 45.9% to the last trading day price of HK $9.25, and an average price of HK $8.42 or 60.4% over the previous 60 trading days.

Therefore, whether BABA has "cut leeks" or not can not be seen by simply comparing the IPO issue price and the privatization price, and should add details for this period of the past.

On the subject of listing

BABA was listed on the Hong Kong Stock Exchange on November 6, 2007, raising more than HK $11 billion, the largest amount raised by a Chinese Internet company.

On the first day of listing, BABA's share price rose 192% to HK $39.50.

Since BABA uses the abbreviation "BABA" when listing in Hong Kong and the United States, one misunderstanding to investors is that the two listings are the same subject.

But in fact, the two are not consistent. In 2007, "BABA" listed in Hong Kong is a B2B business company under BABA Group, while the US listed company is the main body of BABA Group. In addition to B2B business, there are Taobao, Tmall, Aliyun and other businesses.

Therefore, it is not advisable to compare BABA's good performance after the listing of US stocks to the performance of Hong Kong stocks during the period, still less can we think that BABA let American investors make money and cut Hong Kong investors' leeks, the main body is already different, and the situation is also very different.

Stock prices plummeted under the impact of the financial crisis

Different from the well-known business models of Taobao and Tmall, BABA's business model, which was then listed in Hong Kong, was B2B e-commerce, which was easily affected by macro-economy and international trade.

Unfortunately, less than a year after the listing, the financial crisis broke out in the United States, the world economy and international trade declined seriously, and China's import and export data also dropped sharply.

In 2008, BABA's B2B business, which earns 63.5 per cent of its income from the international trading market, was also hit, with revenue growth significantly lower than in 2007 and net profit declining month-on-month. BABA's share price also fell sharply, falling as low as HK $3.605 on October 28th.

However, with the recovery of the world economy and BABA's growing share of China's B2B market and stable performance, the share price rose above HK $13.50.

The return of Big Ali

With the development of China's Internet industry, the e-commerce market has also changed, B2C, C2C model has become a new darling, BABA Group is a well-deserved leader in this field.

However, the change in this industry can not be reflected in BABA (1688.HK), which is listed in Hong Kong with B2B e-commerce business as the main body, and the development prospects of listed companies are bleak.

In 2012, the news of BABA's privatization was announced, and the share price rose 42.7% after the resumption of trading the next day, reaching HK $13.20, close to the offer price.

After that, there is a well-known story. BABA, relying on his position in China's e-commerce market, continues to expand his business territory through acquisitions and investments to create the most valuable Internet company in China.

BABA has handed over the fourth consecutive financial report that exceeded market expectations, showing its strong growth potential. BABA will compete with Tencent in his return to the Hong Kong Stock Exchange. Let's wait and see how he performs.

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