(Bloomberg) — Huitongda Network Co., an e-commerce platform that serves rural China, is considering delaying its planned Hong Kong initial public offering to next year, according to people familiar with the matter.
The company, which counts Alibaba Group Holding Ltd. among its backers, filed in June for a listing that Bloomberg News earlier reported could raise as much as $1 billion. However, Beijing’s crackdown on businesses and the resulting volatility in stocks may prompt Huitongda to postpone the share sale, the people said, asking not to be identified as the information isn’t public.
Deliberations are still ongoing and the company may opt to go ahead with the IPO this year, the people said. Representatives for Huitongda didn’t immediately respond to requests for comment.
If the offering is deferred, Huitongda would be the latest to join a slew of firms that have either pulled their listings or cut the size of their planned offerings in Asia’s financial hub since this summer. Hong Kong-traded mainland-based companies’ stocks are among the world’s worst performers this year, with the Hang Seng China Enterprises Index heading for the biggest decline since 2015 after a slump of more than 16%.
Beijing’s push for social stability by seeking to align companies with President Xi Jinping’s vision of “common prosperity” has hit China’s technology and internet sectors particularly hard. Both Alibaba and food delivery giant Meituan have been targeted by antitrust authorities for their dominance.
While some companies such as health-care startup We Doctor Holdings Ltd. have let their IPO applications lapse, many that got listed since August have seen their shares drop below their offer prices, data compiled by Bloomberg show.
Founded in late 2010, Nanjing-based Huitongda helps rural retailers with supply chain and digital technology, according to its website. Its network covers 21 provinces and over 19,000 towns and villages across China.
Alibaba invested 4.5 billion yuan ($704 million) in the company in 2018, a U.S. exchange filing shows.
China International Capital Corp., China Renaissance Holdings Ltd. and Citigroup Inc. are joint sponsors for Huitongda’s IPO, a prospectus shows.
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