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2026-06-29 10:57:32 NTES-S (09999.HK) announced last Friday (26th) that, after fully complying with the relevant Hong Kong listing rules applicable to dual primary listed issuers, it elected to become a dual primary listed company in Hong Kong, effective tomorrow (30th), BofA Securities said in its report. The conversion timing comes visibly earlier than the broker's expectation and market's consensus of 1Q27. As there is no impact on the company’s operations, the key benefit of a Hong Kong dual primary listing lies in the potential eligibility for inclusion in Southbound Trading of Stock Connect, as dual primary listing is a prerequisite for such inclusion. Given that NTES-S does not adopt a weighted voting right (WVR) structure, the broker expected the company to qualify for Southbound Trading shortly after completing the dual primary listing. Historically, ZAI LAB (09688.HK) and YUM CHINA (09987.HK), both without WVR structures, were included in Southbound Trading on the day they completed their dual primary listing conversion. BofA Securities added that as of last Thursday (25th), BILIBILI-W (09626.HK), MEITUAN-W (03690.HK) and KUAISHOU-W (01024.HK) had the highest Southbound shareholding ratios among China internet stocks, accounting for 22.4%, 21% and 18% of their issued shares, respectively. Since June 2025, Southbound Trading’s contribution to the daily turnover of BABA-W (09988.HK) and TENCENT (00700.HK) (4-week MA) hass consistently surpassed 40%. For many dual-listed China internet stocks, Hong Kong liquidity is now comparable to or even exceeds that of their respective US listings (e.g., BILIBILI-W). Overall, the broker expected Southbound Trading to remain a key source of capital inflows for China internet stocks and foresaw potential inclusion as a catalyst for BIDU-SW (09888.HK), NTES-S and JD-SW (09618.HK). The broker maintained its Buy rating on NetEase, and set a US target price of USD172 for NetEase (NTES.US) and an H-share target price of HKD268. ~ AASTOCKS Financial News Website: www.aastocks.com | |