Why are Chinese stock companies willing to return to Hong Kong for listing?


2020-01-16 07:42:53Beijing News Editor: Wang Jinyu
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Why are Chinese stock companies willing to return to Hong Kong for listing?

2020-01-16 07:42:53Beijing News

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.

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

Why are Chinese stock companies willing to return to Hong Kong for listing?

Lin Zijun:On the one hand, although the US monetary policy is still accommodative and US stocks continue to hit new highs, the possibility of a short-term crash is not high. However, there are more and more signals that the valuation of US stocks indicates that it is not “cheap.” In addition to the frequent changes in the Trump administration ’s China policy, driven by the accumulation of anti-hunger, it is not a bad thing for companies to develop an additional financing channel. More importantly, in recent years, Google and Facebook have been contradicted by the judiciary and the public because of privacy issues. Listing in Hong Kong is also a dual insurance arrangement.

On the other hand, Hong Kong, as the most important window for the Mainland to open to the outside world, currently has a very important value and strategic positioning in the Hong Kong stock market. It is very unlikely that it will be surpassed by other Mainland cities or Macau in a short period of time. At the same time, Hong Kong is also one of the largest markets for new equity financing in the world, which can meet the financing needs of large enterprises.

In addition, a secondary listing in Hong Kong, if it can enter the Shanghai-Shenzhen-Hong Kong Stock Connect in the future, will play a very important role in attracting investment from the Mainland. Compared with the direct return to the A-share listing, Hong Kong has a precedent and a near-term listing as a secondary market, with low costs, simple operation, and reduced adjustments to the company’s legal structure and accounting standards.

Cen Sai Indium:Good companies can mix well no matter which capital market they are in, and the fundamentals are hard enough, so they are not afraid of market disapproval. Not to mention the big Internet companies want to go to the Hong Kong Stock Exchange. Multiple listings can not only broaden the company’s financing channels, but also hedge some macro risks. The Hong Kong Stock Exchange is the most open capital market in China. It is also expected that China Stocks wants to list on this secondary market.

Chen Kaifeng:There are many reasons why Chinese stock companies are interested in the secondary listing in Hong Kong. This is partly because some Chinese stocks have relatively low stock prices, investors are unfamiliar with their business, and have less liquidity. If these Chinese stocks are listed in Hong Kong, they can obtain additional liquidity. After all, Hong Kong is closer to the mainland. Investors have a better understanding of the Chinese economy and are more interested in investing in these companies. Enterprises can expand their shareholder base. This is an important reason.

In the past few years, a large number of Chinese stocks were listed in the United States, and some of them did not perform well.

At this point in time, everyone sees that Alibaba’s secondary listing is doing very well, and it will drive other Chinese stocks to catch up with this trend. In the past year, the Sino-US trade talks have had an impact on many Chinese stocks.

Cen Zhiyong:Alibaba’s secondary listing from US stocks in Hong Kong has indeed played a strong role as a model. Because not all Chinese stocks listed in the United States may have a good trading volume. 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 also a number of investors who know them in Hong Kong.

Enterprises with different rights in the same shares, such as Xiaomi and Meituan, were included in the Hong Kong Stock Connect after half a year of listing in Hong Kong. After joining the Hong Kong Stock Connect, mainland investors have formal channels to invest in these enterprises, and these mainland investors are very familiar with their brands and businesses. It is actually more difficult for these investors to exchange their RMB into US dollars and invest in US stocks.

Beijing News reporter Xu Nuo Liang Chen Lu Yifu Editor Wang Jinyu Proofreading Liu Yue

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