Alibaba-Backed Huitongda May Delay $1 Billion Hong Kong IPO

According to insiders familiar with the situation, Huitongda Network Co., an e-commerce platform that targets rural China, is considering delaying its scheduled Hong Kong initial public offering until next year.

Alibaba Group Holding Ltd. is one of the company's supporters, and it filed for a public offering in June that Bloomberg News claimed may raise up to $1 billion. The crackdown on enterprises in Beijing, as well as the resulting volatility in equities, may force Huitongda to postpone the share sale, according to the insiders, who asked not to be identified since the information isn't public.

According to the people, discussions are still ongoing, and the corporation may decide to go ahead with the IPO this year. Huitongda representatives did not immediately reply to calls for comment.

If Huitongda's IPO is postponed, it would join a spate of companies that have canceled their IPOs or reduced the size of their planned offers in Asia's financial hub since this summer. Stocks of mainland-based companies listed in Hong Kong have been among the worst performers in the world this year, with the Hang Seng China Enterprises Index on track for its worst year since 2015 after a more than 16 percent drop.

China's technology and internet sectors have been struck particularly hard by Beijing's push for social stability by attempting to align enterprises with President Xi Jinping's goal of "shared prosperity." Antitrust authorities have targeted both Alibaba and Meituan, the Chinese food delivery company, for their market domination.

While some firms, such as health-care startup We Doctor Holdings Ltd., have allowed their IPO applications lapse, Bloomberg data shows that several that have been listed since August have seen their shares fall below their offer prices.

According to its website, Huitongda, situated in Nanjing, assists rural retailers with supply chain and digital technology. Its network stretches across China, covering 21 provinces and nearly 19,000 cities and villages.

According to a U.S. exchange filing, Alibaba invested 4.5 billion yuan ($704 million) in the company in 2018.

According to the prospectus, China International Capital Corp., China Renaissance Holdings Ltd., and Citigroup Inc. are joint sponsors for Huitongda's IPO.