What challenges will the secondary listing bring to returning companies?
After Alibaba, the team returning to the Hong Kong stock market to dig for gold continued to grow in various rumors. Although NetEase, Ctrip and other companies did not comment on this, in the eyes of the outside world, this wave is unstoppable.
There are predictions that Alibaba, which has been listed in the US for five years, has moved to Hong Kong, China. Affected by this, from the beginning of this year, Chinese stocks will be listed in Hong Kong. As for why Chinese stock companies have shown great interest in returning to Hong Kong for a secondary listing, experts believe that the US technology industry has been relatively developed, and many Chinese stocks have previously gone to the US for financing. However, in recent years, a number of technology companies from the mainland have been listed in Hong Kong, and there are a number of local investors who understand them. The secondary listing in Hong Kong, if it can access the Shanghai-Shenzhen-Hong Kong Stock Connect in the future, will play a very important role in attracting mainland capital investment. In addition, the multiple listings of major Internet companies can not only broaden the company’s financing channels, but also hedge some macro risks. Zh
Lin Zijun:One is the challenge of compliance, especially the increasingly stringent regulatory agencies; the other is the challenge of maintaining investor relations, because the attributes of investors in the United States and Hong Kong (especially if they enter the Shanghai-Shenzhen-Hong Kong Stock Connect in the future) are very different.
Although Alibaba’s selection of Hong Kong as a secondary market has performed very well, the increase in trading volume and stock price has proved investors’ recognition of the company. But the inevitable problem is that if the company itself is not good or not favored by investors, it will face the problem of poor liquidity. At the same time, companies are also subject to scrutiny by US and Hong Kong regulators, so corporate actions, especially compliance, face greater challenges. Taking a step back, choosing whether to return to A-shares or Hong Kong as a secondary market is actually a strategic decision. If a company ultimately wants to return to A-shares, then it will have a heavy emphasis on the structure of Hong Kong listing, and the cost of exiting in the future will be greater.
Cen Sai Indium:Listing in both places means that listed companies must not only comply with the laws and regulations of the US Securities and Exchange Commission, but also meet the requirements of the Hong Kong Securities and Futures Commission. However, even if the requirements of the CSRC differ in details, the essence is to better balance the relationship between listed companies and investors. As long as we grasp the essence, do a good job of information disclosure, and conduct lawfully and compliantly, we can cope with it wherever we are.
As a well-known Internet company, if Baidu chooses to go to Hong Kong for a secondary listing, if successful, it can raise a large amount of funds from the market for the company’s future development, and also expand the company’s future financing channels, enabling multi-market financing. On the other hand, the listing of returning Hong Kong stocks will attract market capital to pay attention to the company. If the company is just undervalued at this time, then the situation of strong market attention will be conducive to the repair of the company’s valuation.
Chen Kaifeng:The first is the issue of currency. The United States and Hong Kong conduct transactions in two different currencies, the US dollar and the Hong Kong dollar, and the management of the enterprise during the transaction is a big problem. Second, the costs of listing and listing in both places are quite high.
Cen Zhiyong:The cost of listing in the two places must be relatively high. At a minimum, listing in the United States and Hong Kong requires payment of the corresponding listing fees and professional services fees, which is an expense for listed companies. At the same time, as more and more technology companies come to Hong Kong for listing or secondary listing, but investors’ funds are limited, competition among enterprises will also become more intense. If everyone invests money in popular companies like Alibaba, then the funds that can be invested in other China stocks will also decrease accordingly.
Beijing News reporter Xu Nuo Liang Chen Lu Yifu Editor Wang Jinyu Proofreading Liu Yue