China’s e-commerce giant Alibaba Group Holding Ltd. has filed for an initial public offering on the Hong Kong stock exchange that could launch as soon as the third quarter of this year.

Bloomberg and Reuters today reported that “people familiar with the matter” said the company hopes to raise up to $20 billion from the listing. Bloomberg added that China International Corp. and Credit Suisse Group AG are serving as lead banks in the listing, which would be the biggest Hong Kong has seen since 2010.

Alibaba had previously listed on Hong Kong’s stock market in 2007, only to delist in 2012. The internet retailer announced one year later it was considering going public again, and Hong Kong was thought to be its preferred destination. But Alibaba snubbed the former British colony in favor of a $25 billion listing on the New York Stock Exchange, a decision it made because of Hong Kong’s refusal to accept dual-class share structures.

Hong Kong has since changed its rules to allow dual-class share mechanisms, which means that listed technology firms can have share classes with different voting rights, Reuters said.

Alibaba founder Jack Ma (pictured) said last year he would “seriously consider” a listing in Hong Kong when it was reported to be preparing to allow dual-class share listings. The intention is for Alibaba to diversify its funding channels and boost liquidity, according to Bloomberg.

The rule change has made Hong Kong more attractive for tech firms, especially Chinese ones. Smartphone maker Xiaomi Corp. and another online retailer, Meituan-Dianping Inc. have both gone public in the city in the last year.

Alibaba, which reportedly had about $30 billion of cash in its coffers as of March 2019, needs more funding as it struggles to sustain its growth amid a slowdown in China’s economy. The company fears the economic situation could worsen amid China’s ongoing trade war with the U.S.

Bloomberg said the money raised from the Hong Kong listing could be used by Alibaba to fund a “war of subsidies” with its rival Meituan in industries such as food delivery and travel. The listing would also boost Hong Kong’s attractiveness as a destination for other Chinese tech firms considering a public listing.

“If this materializes, it’s good news for Alibaba, Hong Kong and mainland China shareholders,” said Holger Mueller, principal analyst and vice president of Constellation Research Inc. “Alibaba’s e-commerce and cloud business needs a lot of capital expenditure. It will also benefit Hong Kong as a stock market and give Chinese investors a chance to partake in Alibaba’s success.”

Photo: John Tan/Flickr