NetEase Recorded 359 Times Oversubscription

NetEase, a leading Chinese gaming Company, is going to launch its secondary listing in Hong Kong Exchange on June 11......

Stocks (1)

NetEase, a leading Chinese gaming Company, is going to launch its secondary listing in Hong Kong Exchange on June 11. The Company confirmed the priced offering at HK$123 to raise HK$21 billion. NetEase's ADS closed at $409.54 in the U.S. as of June 9, converting to around HK$127.4 each share.

The IPO of Netease in Hong Kong oversubscribed 359 times. It indicates many investors are confident on this gaming company.

NetEase develops and operates online PC and mobile games, advertising services, email services and e-commerce platforms in China. According to App Annie, NetEase is ranking second in China gaming market in 2019, just behind the technology giant Tencent.

Recently, the Company announced that 1Q net income was up 30.0% on year to 3.6 billion yuan on revenue of 17.1 billion yuan, up 18.3%.

Besides, the Hang Seng Company allowed secondary-listed company from Hong Kong, mainland China, Macau and Taiwan will be eligible to be included in the Hang Seng Index and Hang Seng China Enterprises Index, with a weighting cap of 5 percent. Under this situation, NetEase would be possibly to enter the index after listing a certain of time, as the market capacity is around 53 billion dollars, which is larger than some Hang Seng Index's components stocks.


On a daily chart, the stock in the U.S. market is supported by a rising trend line drawn from March low, indicating a bullish outlook. 


Source: GAIN Capital, Trading View

Currently, the prices are trading above both rising 20-day and 50-day moving averages.

In this case, bullish readers could set the support level at $360 (the overlapping support level), while the resistance levels would be located at $428 (recent high) and $482 (138.2% fibonanci projection).

More from Equities

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.