NetEase files for Hong Kong secondary listing, amid scrutiny over Chinese firms’s CEO William Ding Lei speaks during 2019 NetEase Future Conference at Hangzhou International Expo Center on November 23, 2019 in Hangzhou, Zhejiang Province of China.

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NetEase, a U.S.-listed Chinese online gaming company, confirmed on Friday it will seek a secondary listing in Hong Kong.

The move comes amid greater scrutiny of Chinese firms listed in the U.S. 

“We are also preparing our secondary listing on the Stock Exchange of Hong Kong, bringing our established brand back to China,” William Ding, CEO of NetEase said in a letter to shareholders on Friday. “I believe that returning to a market that is closer to our roots will further fuel our passion in our business and our users.”

The accompanying regulatory filing did not unveil the amount of capital NetEase will raise nor the timing of the listing. 

CICC, Credit Suisse and J.P. Morgan are the joint sponsors of the Hong Kong listing. 

The move by NetEase comes as geopolitical tensions rise between the U.S. and China, which are threatening to affect Chinese companies listed on Wall Street. It also comes as lawmakers in Washington push for greater scrutiny of companies from China that are listed in the U.S.

The U.S. Senate passed a piece of legislation called the Holding Foreign Companies Accountable Act earlier this month. If it becomes law, it would require companies to certify that “they are not owned or controlled by a foreign government” as well as face greater auditing measures. 

NetEase’s decision was likely also bolstered by Chinese e-commerce giant Alibaba’s successful decision last year to raise capital in Hong Kong. Alibaba’s Hong Kong shares are up around 10% from its 176 Hong Kong dollar listing price in November.  

Alibaba and now NetEase’s secondary listing will give the Hong Kong market a much needed boost as fears mount that the city could lose its status as a financial hub following protests over a national security law proposed by China. The protesters are concerned about the increasing influence of Beijing over the city. 

Hong Kong has lost key technology initial public offerings or IPOs to the U.S. over the past few years because it did not allow dual-class stock structures. These are shares which give different voting rights. Those rules have been changed, however. 

Meanwhile, the Hang Seng index will for the first time allow companies with primary listings elsewhere, as well as those with dual-class shares, to be included in the 50-year-old benchmark. That could mean more investor interest in tech companies doing secondary listings in Hong Kong. 

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