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By: Kwok Chiu Tung 郭昭彤Edited by: Zhu Zijin Cora 朱子槿

Business

BNO migrants sell Hong Kong properties for UK tax reasons

  • The Young Reporter
  • By: Kwok Chiu Tung 郭昭彤Edited by: Zhu Zijin Cora 朱子槿
  • 2021-05-11

Hong Kong British National (Overseas) (BNO) passport holders moving to Britain tend to sell their properties in the city to avoid related taxes charged by the UK government on overseas properties and that may trigger a capital outflow of up to HK$280 billion from Hong Kong, based on banks and media estimation. BNO migrants will be subject to the UK's global tax system, under which their rental income from Hong Kong will be taxed and if they want to buy a residential property in Britain without selling their Hong Kong residence they have to pay an extra 3% of stamp duty. Therefore, Hong Kong residents emigrating to the UK are pondering what to do with their Hong Kong flats. Chan Siu-yi, 36, who moved to the UK several months ago with a BNO visa, has decided to sell her property in Hong Kong to avoid extra taxes. “The global taxation policy might charge us about €2000 (HK$18,717) every tax season if we don’t sell our property in Hong Kong after moving to the UK within 9 months,” she added. The British government launched a new policy after China passed a national security law last year, to allow Hong Kong BNO holders to live and work in the UK for up to five years and eventually seek citizenship. The policy is expected to spark a new wave of immigration. The British Home Office said in January that the number of immigrants via HK BNO visas is expected to reach between 258,000 and 322,400 over five years. Based on the estimation of Bloomberg Intelligence Research, up to 16,300 Hong Kong households may move to Britain via BNO visas this year and a maximum of HK$150 billion worth of properties from these families could be on sale in 2021 alone. A Bank of …

Business

US-listed Chinese firms rush to HK despite lukewarm welcome

  • The Young Reporter
  • By: Zhu Zijin Cora 朱子槿、Zhou Yichen Gloria 周奕辰Edited by: Zhu Zijin Cora 朱子槿
  • 2021-04-30

Erica Lam, a 30-year-old broker eager to buy new shares of technology companies for profit, saw the Hong Kong secondary listing of online entertainment company Bilibili Inc. (9626) a great opportunity and bought 3,000 of its new shares.  However, the stock price of Bilibili fell as much as 6.8% on the first day of trading, translating into a loss of HK$165,000 for Ms Lam. Before Bilibili, search giant Baidu also briefly fell 0.2% below its Hong Kong IPO price and ended the first day of trading unchanged. "The listings of Baidu and Bilibili came amid a cooling market when Asian investors showed less enthusiasm for IPOs and worried about the increasingly high valuation of technology stocks in recent years," said Wang Hui, a portfolio manager at Haitong Securities. "On top of that, the rise in U.S. bond yields has also caused many investors to sell tech stocks." Higher interest rates are particularly damaging to high-growth tech companies as investors value them based on expected earnings over the next few years, she said. The Hang Seng Tech Index of top technology companies has dropped 22.3% from its Feb.17 high to 8500.13.  Also, China set its 2021 GDP growth target at above 6%, lower than the market’s expectation of  8% growth, which made investors worry about a tightening in monetary and fiscal policies. "Such a conservative GDP forecast would undermine investor confidence," said Ms Wang.   Booming home-coming trend under increasing Sino-US tensions Bilibili, like many Nasdaq-traded Chinese companies, jumped on the homecoming bandwagon by listing their stocks in Hong Kong with tech heavyweight Alibaba taking the lead in late 2019 due to growing Sino-US tensions. The two countries have played tit-for-tat with increased tariffs, imposed sanctions and targeted regulations. To hedge against rising risks, more mainland tech companies chose to seek secondary …

Business

TikTok owner ByteDance likely to launch Hong Kong IPO in second quarter

  • The Young Reporter
  • By: Vikki Cai ChuchuEdited by: Zhou Yichen Gloria 周奕辰
  • 2021-04-16

ByteDance has started preparations for its Hong Kong IPO and is likely to file a prospectus in the second quarter assuming the company’s valuation of up to $400 billion (HK$3.12 trillion), about 1.8 times of its competitor Kuaishou, according to media reports. Caixin Global said if the Hong Kong IPO could be successfully launched, ByteDance would be the third most valuable listed company at the Hong Kong stock exchange behind Tencent and Alibaba group. Caixin put the valuation of ByteDance at about US$300 billion (HK$ 2.33 trillion) while Hong Kong and international media reported that it would be up to $400 billion (HK$3.12 trillion). However, ByteDance kept silent on the rumoured listing plan.  The listing of the Beijing-based start-up is expected to include BtyeDance’s most popular mobile applications such as Douyin, news platform Toutiao and video service Xigua. TikTok will probably seek a separate listing since it involves overseas assets, Caixin said. China Securities Journal said that ByteDance had notified the operator of the HKEX that it had appointed securities underwriters on Wednesday but the media took away the story from its website on the same day. According to the HKEX underwriting agreements, firms are required to appoint sponsors and underwriters at least two months ahead of applying for IPO. The latest stock-option price for employees trading their bonuses to ByteDance’s unlisted stocks more than doubled compared with last year to $126 (HK$978.82) per share from under $50 (HK$388.42). The price did not move much from 2019 to 2020 at around $44 (HK$341.81). The prominent rise in internal stock-option price reflects the private equity market’s assessment of the firm’s value in the past 12 months. ByteDance now is the world’s highest-valued unicorn. ByteDance’s rival Kuaishou, with 271 million daily active users, reported revenue of 58.8 billion yuan (HK$ 69.93 billion) …

Business

China's Trip.com raises up to $1.4 bln in HK secondary listing amid tourism recovery

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰Edited by: Kwok Chiu Tung 郭昭彤
  • 2021-04-09

Chinese online travel giant Trip.com Group Ltd. (9961) is raising as much as $1.4 billion (HK$ 10.9 billion) in its Hong Kong secondary listing, as a rebound in travel may lead to a business revival.  The public offer started on Thursday and would run through Apr.13, with trading expected to start on Apr.19, according to its listing document. The Nasdaq-listed company (Nasdaq: TCOM) is offering 31.6 million shares at a maximum price of HK$333 apiece. That's a premium of 11% to its closing price of $38.55 (HK$ 299.88) on Nasdaq on Thursday. Each Trip.com's American depositary receipt represents one ordinary share to be listed in Hong Kong. "Trip.com's secondary listing in Hong Kong could increase cash flow, diversify risk and attract more Asian investors amid growing tensions between China and the U.S.," said Zhang Xiao, an analyst from Great Wall Securities. "The domestic tourism is recovering strongly and the global tourism will gradually recover as more people having vaccinations. This will boost investor confidence and bring more opportunities for Trip.com to increase its market value." The Shanghai-based company is among the growing cohort of U.S.-listed Chinese firms to carry out homecoming listings, including search giant Baidu which is Ctrip's single largest shareholder holding a stake of 11.5%. Total fundraising via new share listings in Hong Kong surged 822% to a record high in the first quarter. Trip.com provides comprehensive travel products and services on its global one-stop travel platform, generating revenues primarily from the accommodation reservation and transportation ticketing businesses. Due to the severe impact of COVID-19 on the global tourism industry, the company's revenue in 2020 plunged 49% to 18.3 billion yuan (HK$ 21.74 billion), according to the prospectus. It also saw a loss of 3.3 billion yuan (HK$ 3.92 billion) after making a profit of 7 billion yuan …

Business

Hongkongers jump on live streaming e-commerce trend

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰、Zhu Zijin Cora 朱子槿Edited by: Zhu Zijin Cora 朱子槿
  • 2021-03-25

Standing in the spotlight, Connie Hung enthusiastically sold a range of products to more than 30,000 people watching her live streaming. "Our products are of high quality and low price. Don't hesitate to buy them," said Ms Hung, a former insurance broker and veteran marketer. Numerous messages concerning the products pop up continuously from the viewers. In this Facebook Live with Group Buyer, one of the most popular group-buying websites in Hong Kong, Ms Hung pitched the company's products, mainly daily groceries, and the two hours’ sales exceeded the company's sales volume for three days. "More and more merchants are willing to come to me to do live streaming for their products because it can save the high cost of online advertising," said Ms Hung. "Every live streaming is watched by tens of thousands of people. Through interaction with fans, the sales are much higher than just advertising," she said. More Hongkongers like Ms Hung are becoming livestreamers, jumping on the new e-commerce bandwagon to tap into the profit as COVID-19 lingering and more brick-and-mortar stores sorting alternative ways to stay afloat. China’s live-streaming craze Influencer streaming has first shown prosperity in the mainland and has already become a new normal in China retail industry. According to iiMedia Research, the market size of the country’s live streaming e-commerce reached 961 billion yuan (HK$1.15 trillion) in 2020, with a year-on-year growth of 121.5%. As of June 2020, China has 309 million live-streaming consumers, accounting for about a third of its internet population. During the live interactive online video shopping, the influencer, as a host, hawks on viewers by introducing products and services, meanwhile adding non-shopping contents to make the whole session attractive. They will also answer viewers’ questions on-site and many offer exclusive discounts to lure customers. The top influencers such …

Business

Bilibili raises up to $3.2 billion in Hong Kong secondary listing amid a cooling market

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰Edited by: Kwok Chiu Tung 郭昭彤
  • 2021-03-19

Chineses video-sharing platform Bilibili Inc. (9626) planned to raise as much as $3.2 billion (HK$ 24.85 billion) in its secondary listing in Hong Kong, while the recent corrections in the market may force the company to price the stock below its maximum offering price. The public offer commenced on Thursday and would run through Mar.23, with trading expected to start on Mar.29, its listing document said. The Shanghai-based Bilibili, backed by Tencent Holdings Ltd. and Alibaba Group Holding Ltd., went public on Nasdaq in March 2018 (Nasdaq: BILI). Its 25 million Hong Kong shares are on offer at a maximum price of HK$988 apiece, 16.9% higher than its U.S. stock closing price of $108.82 (HK$ 845.18) on Thursday. Each American depositary receipt represents one ordinary share to be listed in Hong Kong. "Recent declines in the share prices of many US technology stocks and the volatility in the Hong Kong stock market could depress Bilibili's final price," said Wang Hui, a portfolio manager at Haitong Securities. "The final offer price will have a lot to do with the value of Bilibili’s American Depositary Receipts in the coming week, as well as the investor demand level." Baidu, another technology stock listed in the U.S, just completed its Hong Kong IPO on March 17. It initially priced its shares at HK$295 based on the average trading price of its US stocks in the previous period of time. But eventually, Baidu cut its offer price by 14.6% to HK$252 due to the recent decline in its US share price. The Nasdaq Composite Index fell 7.5% from its 2021 high of 14,175.12 to close at 13,116.17 overnight. The Hang Seng Index closed at 29,405.72 on Wednesday, down 5.7% from its 2021 peak of 31,183.36. Bilibili generates its revenues primarily from mobile games, value-added services, …

Business

Baidu raises up to HK$28 billion in Hong Kong secondary listing

  • The Young Reporter
  • By: Vikki Cai ChuchuEdited by: Zhou Yichen Gloria 周奕辰
  • 2021-03-12

Baidu Inc. (9888), China's search engine giant, plans to issue 95 million shares at a maximum global offering price of $38 (HK$295) each, raising up to $3.6 billion (HK$28 billion) in a Hong Kong offering starting today till 12:00 noon on Mar. 17. Baidu (NASDAQ: BIDU) shares, which were listed on the Nasdaq in August 2005 in terms of American Depositary Shares (ADSs), increased 12% to $272.38 (HK$2113.82) overnight boosted by its secondary listing plan in Hong Kong. Each ADS represents eight ordinary shares to be listed in Hong Kong. The ADS hit a record of  $339.91 (HK$2637.33) on Feb. 19. The company will sell a total of 95 million shares under the global offering.  The final pricing of Hong Kong shares will be fixed on Mar. 17. Dealing in shares on the Hong Kong Stock Exchange is scheduled to start at 9 am on Mar. 23, Baidu said in its listing document. Baidu generated a net income of 22.5 billion yuan (HK$ 26.92 billion), 2.1 yuan billion (HK$ 2.51 billion), and 27.6 billion yuan (HK$33.02 billion) in 2020, 2019, and 2018 respectively.  The 21-year-old company has three main growth engines: mobile ecosystem, AI cloud and intelligent driving. The core of Baidu Mobile Ecosystem is Baidu App with a monthly active user of 544 million in December 2020. “We intend to pursue the following strategies to further grow our business:  continue to invest in technology; continue to scale our AI Cloud; further develop and commercialize intelligent driving and other growth initiatives; continue to grow our Mobile Ecosystem; and selectively pursue M&A and strategic investments,” said in its prospectus. Baidu’s listing will make it one of the Chinese technology companies that are listed in the US and have secondary offerings in Hong Kong, joining Alibaba, JD.com and NetEase. The joint sponsors of …

Business

Pop Mart wins as blind box mania sweeps through Chinese youths

  • The Young Reporter
  • By: Zhu Zijin Cora 朱子槿、Zhou Yichen Gloria 周奕辰Edited by: Zhu Zijin Cora 朱子槿
  • 2021-02-27

Anna Wang Kai-cen, a 27-year-old wealth manager, is one of the beneficiaries in China’s mystery or blind box craze by snapping up the toys and shares of Pop Mart International Group Ltd. (9992), the most famous blind box retailer in China. "I first entered the Pop Mart shop in Beijing two years ago, just out of curiosity why my friends bought so many of their toys," said Ms Wang. Twenty minutes later, she got her own toy, a vinyl doll dressed in a yellow suit with big blue eyes called Molly. Since then, apart from buying toys, Ms Wang started to pay attention to the designer toymaker and seller behind, Pop Mart, which went public in Hong Kong on Dec. 11 last year. The young wealth manager is among hundreds of thousands of investors betting their money on this Chinese largest designer toymaker, setting eyes on the behind “new economy” growth opportunities.  Within one day after IPO,  Ms Wang earned more than HK$70,000 by selling her some 2,000 new shares of Pop Mart, thanks to the blind box mania, which is taking over China by storm. Shares of Pop Mart jumped to a high of HK$89.60 in December, more than doubling its initial public offering price of HK$38.50, boosting the total market value of the company to more than HK$120 billion. The stock closed at HK$89.9 on Friday. "Of course I know its toys are popular among us young generation, but I didn’t expect their stocks are also that popular in public," Ms Wang said.  The "first blind box stock" Pop Mart is famous for its blind box selling strategy. Customers will not know what the toy looks like until they unpack it, sharing the same nature with toys in a capsule called Gashapon, or “niu dan'' in Hong Kong.  …

Business

Budget Address 2021: Effects of unemployment loan in doubt

  • The Young Reporter
  • By: Zhu Zijin Cora 朱子槿、Kwok Chiu Tung 郭昭彤Edited by: Zhou Yichen Gloria 周奕辰
  • 2021-02-24

Hong Kong's Financial Secretary Paul Chan Mo-po said on Wednesday unemployed citizens can apply for government-backed low interest personal loans of up to HK$80,000 but citizens cast doubt on its effectiveness because some fear that they cannot repay the loan. The one-off loan at an interest rate of 1% per annum is part of the government’s relief measures announced by the Financial Secretary in his budget speech amid the city’s unemployment rate hitting a 17-year high of  7% in January, with more than 250,000 people unemployed. “The labour market deteriorated sharply,” said Mr Chan in the speech. “This prolonged economic downturn has plunged some people into financial difficulties.” As an extra financing option for the unemployed, eligible individuals can pay interest only in the first year, and then repay the principal plus interest within the next five years. People who repay on time will get the interest back at the end. “I think the budget is reasonable and fair, especially in giving low interest rate loans to the unemployed,” said Teresa Tong, 65, former Partner at Ernst & Young Hong Kong. “ It’s a new idea for this year and it’s pretty innovative. It’s the right way to support the poor and unemployed rather than just offer them money.” “But some people are reluctant to borrow from the government”, said Kwok Man-ho, district councillor Tin Shui Wai. He has received comments from about a dozen of residents and none of them planned to apply for the loan as they were not sure if they were able to repay later. Besides, Mr Kwok also said the amount of the loan was too small, especially for people who were not living in public housing. “Since the unemployed have no idea when they can find jobs, most of them prefer direct unemployment grants …

Business

Budget Address 2021: Deficit hits record high Forecasts economy return to growth this year

  • The Young Reporter
  • By: Zhou Yichen Gloria 周奕辰、Vikki Cai ChuchuEdited by: Zhu Zijin Cora 朱子槿
  • 2021-02-24

Hong Kong government's fiscal deficit would hit a record of HK$257.6 billion this financial year, Financial Secretary Paul Chan Mo-po said in his budget speech on Wednesday. The deficit was expected to narrow a bit to HK$101.6 billion in 2021/22, accounting for 3.6% of GDP as a series of supporting measures and the continued increase in recurrent expenditure.  Mr Chan also forecasted the city's economy would return to growth of between 3.5% to 5.5% this year, due to an expected recovery in the global economy and the effect of local stimulus measures. The Financial Secretary delivered his budget speech at a Legislative Council meeting today with a focus on “stabilising the economy and relieving people's burden”. He said the economy would still face significant challenges in the first half of the year, but "economic recovery will likely gain a stronger momentum in the second half of the year in tandem with an expected rebound in the global economy." However, he also said, “With the epidemic still lingering, our economy is yet to come out of recession.” “As the social distancing restrictions are relaxed and more people are vaccinated, confidence among investors and citizens will increase, and there will be corresponding economic activities to help the economy recover,” said Billy Mak, associate professor from the Department of Finance and Decision Sciences of Hong Kong Baptist University. “But the recovery process may take three or four years, and the economy this year will still be difficult.” Mr Chan also alerted that Hong Kong would record a deficit for a number of years after achieving a surplus for 15 years. Despite this, the government still decided not to cut spending that affects people's livelihood, especially resources for education, social welfare and healthcare, in order to protect people's livelihood and maintain public confidence. By …