NetEase looks to Hong Kong secondary listing, sources say

By Echo Wang and Scott Murdoch

NEW YORK/HONG KONG, May 5 (Reuters) - Chinese technology group NetEase is set to become the next major mainland company to sell its shares in Hong Kong, two sources familiar with the matter said, in a secondary listing that one media report said could raise up to $2 billion.

The company has appointed China International Capital Corporation (CICC), Credit Suisse and JPMorgan to lead the transaction, sources said, requesting anonymity because the information has yet to be made public.

NetEease, Credit Suisse and JPMorgan declined to comment on the deal. CICC did not respond to a Reuters request for comment outside of Asian business hours.

IFR earlier reported that NetEase could look to raise up to $2 billion in the Hong Kong share sale.

The Nasdaq-listed NetEase has a $42.5 billion market capitalization, according to Refinitiv.

The company's chief financial officer, Charles Zhaoxuan Yang, is a former investment banker at JPMorgan, according to the company's website.

NetEase's decision to carry out a secondary listing follows a similar move by JD.com which is aiming to raise up to $3 billion in a deal that could occur as early as June.

JD.com is working with Bank of America and UBS on the listing.

A listing of both companies would be a big win for the Hong Kong capital markets which have battled to attract major deals in 2020, primarily due to the coronavirus outbreak.

Refinitiv data shows there has been $12.81 billion worth of equity capital market activity in Hong Kong during 2020 but primarily in follow-on deals and convertible bond transactions.

In comparison, there has been just $2.45 billion worth of IPOs in 2020, according to Refinitiv, down from $4.27 billion for the same time in 2019. (Reporting by Echo Wang in New York, Scott Murdoch, Kane Wu and Pei Li in Hong Kong; editing by Philippa Fletcher)