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On Thursday, the Chinese gaming company NetEase debuted in a secondary listing on the Hong Kong stock exchange, closing at HK$130 a share, seven points above its initial public offering price of HK$123. The stock was Thursday’s second-highest traded company on the exchange, and the listing helped the company raise $2.7 billion.

The Hong Kong IPO represents NetEase “returning to a market in which we share a closer mutual understanding,” said CEO William Ding. The comment was perhaps a swipe at the U.S.’s Nasdaq, where NetEase has traded since 2000 and where skepticism of Chinese companies is growing.

In the wake of an April fraud scandal surrounding the Nasdaq-listed Chinese coffeehouse chain Luckin Coffee, Nasdaq proposed rules on May 18 to the U.S. Securities and Exchange Commission that would impose stricter fundraising and auditing requirements, thus making it more difficult for Chinese companies to debut on its exchange.

The U.S. Senate also has passed a bill that would require Chinese companies to undergo financial audits in order to keep their U.S. listings. The bill currently is being considered by the U.S. House of Representatives, but, if passed, could lead to the delisting of dozens of Chinese companies on U.S. exchanges.

NetEase is the largest Chinese company to pursue a secondary listing in Hong Kong since Alibaba’s blockbuster IPO in Hong Kong last November. Its offering comes as rising tensions in the U.S. have encouraged other Chinese firms, like e-commerce company JD.com, to seek secondary listings in Hong Kong. Many analysts predict NetEase’s offering Thursday will be the first of many Hong Kong debuts by U.S.-listed Chinese firms now under closer American scrutiny.

What is NetEase?

NetEase debuted on the Nasdaq 20 years ago, and its shares on that exchange have traded at record highs recently, notwithstanding the controversy over U.S. listing requirements for Chinese firms.

On Jan. 2, shares on the Nasdaq were trading at $329, giving NetEase a market capitalization of $31 billion. On Thursday, shares were at $425, for a market cap of roughly $55 billion. The surge reflects the boom in Chinese online gaming during the coronavirus pandemic. Online gaming revenue in China during the first quarter of 2020 surged 30% from the same period in 2019.

NetEase, China’s second-largest gaming company behind the tech giant Tencent, has said it will use the cash injection from the Hong Kong listing in part to expand its global presence.

The company announced Monday that it will open a new game development studio in Tokyo; its Knives Out game is already one of Japan’s most popular. The Tokyo location will be the company’s second international gaming studio; it opened one in Montreal last November.

In China, NetEase boasts some of China’s most popular online games like Tianxia III and Heroes of Tang Dynasty Zero. Its most popular franchise, which has some 360 million users and has earned the company $6.5 billion in profits, is called Fantasy Westward Journey.

Returning home

NetEase’s Hong Kong IPO reflects a trend that Hong Kong Exchanges and Clearing CEO Charles Li identified in mid-May in an interview with Fortune: He expressed regret that the state of U.S.-China relations was taking a toll on Chinese companies in the U.S., but admitted that Hong Kong would likely benefit from Chinese firms seeing Hong Kong as an alternative to the U.S.

“Americans will be best served if Chinese companies are allowed to succeed there,” he said. “But if in the short term, for whatever reason, they are not welcomed, we always welcome that.”

Chinese firms indeed seem reluctant to enter the U.S. market. In the first six months of 2019, Chinese IPOs in the U.S. raised $3.5 billion. This year, that figure has fallen to $1.7 billion, according to Reuters.

Last week, during a conference call with the investment bank Piper Sandler, Li seemed confident that NetEase may only be one of many Chinese companies this year to pursue primary and secondary listings in Hong Kong rather than looking toward the U.S.

“This is going to be a big year for IPOs, including both huge IPOs from China, but very substantial returnees, what we call them, from the United States,” Li said.