Reporter Cui Wenjing and Xia Xin reported from Beijing
"At present, there are about 270 Chinese stocks listed in the United States, of which about 60% are listed on the NASDAQ, but after these Chinese stocks have been listed in the United States for a period of time, many of them have not been active in trading, the valuation is not ideal, and even the refinancing function has been lost." On November 10th, at the 2021 Outstanding Competitiveness Finance Summit hosted by China Business Daily and hosted by CEI Future, Wang Jing, CHIEF Executive Officer of EVERB International, was invited to attend and deliver a keynote speech on "The Return of Chinese Stocks to See the Development of Overseas Chinese Investment Banks". Taking the return of Chinese stocks in recent years as a starting point, the speech elaborated on the main advantages of Chinese-funded enterprises listed in Hong Kong, and made a detailed analysis of the role played by overseas Chinese investment banks and future development opportunities.
In the past three years, 16 Chinese stocks have been listed in Hong Kong for the second time
When talking about the return of Chinese stocks, Wang Jing pointed out that the more than 270 Chinese stocks currently listed in the United States are mainly concentrated in the Internet, technology and education industries, and the early listing of Chinese-funded enterprises in the United States mainly takes into account a variety of factors such as long-term institutional investors in the united states, more recognized business models and more flexible listing standards, but in recent years, due to Sino-US economic and trade frictions have gradually affected the financial field, the United States has successively introduced a series of new regulatory regulations, including the "Foreign Company Accountability Act". China has also promulgated a number of regulations this year to increase the information security review of companies listed in the United States, plus many Chinese stocks are not active in trading in the United States, valuations are not ideal or even lose the refinancing function, resulting in many Chinese stocks have chosen Hong Kong with more inclusive policies as the first choice for secondary listing.
"There is no way in the United States, and the willows are dark and the flowers are bright and another village." The difficulty and rising cost of listing in the United States have made more and more Chinese stocks choose to abandon US stocks and return to Hong Kong stocks and A-shares. The return of Chinese stocks not only brings back a large number of outstanding enterprises to China's capital market, but also gives domestic investors more opportunities to enjoy the dividends brought by the development of Chinese-funded enterprises. Wang Jing said.
She further mentioned that unlike the US SEC, the Hong Kong market has strengthened its interaction and cooperation with the mainland in recent years, and made many reforms that are conducive to the listing and financing of Chinese-funded enterprises in Hong Kong. In April 2018, the Hong Kong Stock Exchange launched the biggest institutional reform in 25 years, amending the second listing rules, introducing the REFORM of the AB share system, further simplifying the process, formulating relevant exemption rules, and gradually allowing the listing of non-profit biotechnology companies and SPAC special purpose acquisition companies. The interconnection of the two markets has also achieved remarkable results. According to statistics, in the past three years, 16 Chinese stocks have been listed in Hong Kong for the second time, and the scale of new funds raised has exceeded HK$300 billion, of which 90% belong to the new economy leaders such as consumption, information technology and health care.
In 2020, the top 10 Chinese securities companies in the Scale of IPO Underwriting in the Hong Kong stock market accounted for 7 seats
"As an irreplaceable global financial center, Hong Kong investors are relatively rich and mature, and from the perspective of source structure, there are both large European and American funds, as well as local institutions and retail investors, as well as growing Chinese investors." Wang Jing mentioned at the forum that the leading role of Chinese investors in Hong Kong's IPO listing has become more and more apparent, which has continuously injected new vitality into the listing of Hong Kong's primary market and secondary market transactions, and has more and more voice in valuation and pricing.
"In the 2020 annual IPO underwriting scale ranking, Chinese securities companies occupy 7 of the top 10, and more than half of the top 20 Chinese securities companies are also more than half. Compared with the head international investment banks, although Chinese investment banks still have shortcomings in terms of global distribution network, capabilities and international influence, they have benefited from the leap in the mainland economy in recent years and the gradual opening up of the financial market, Chinese investment banks have occupied a very important position in the Hong Kong capital market, and the future development is even more gratifying. Wang Jing said.
The return of Chinese stocks has brought historic opportunities for Chinese investment banks in Hong Kong
"Chinese stocks have returned, and A-shares and Hong Kong stocks have their own advantages." Wang Jing believes that there are obvious differences in the positioning of the Hong Kong Stock Exchange and the Shanghai Stock Exchange, the Shenzhen Stock Exchange and the Beijing Stock Exchange, and there are more complementaries than competition. As an important international financial center and a national window to the outside world, Hong Kong's capital market attracts a large number of outstanding Chinese-funded enterprises with its unique advantages. Its advantages are reflected in three aspects:
First, Hong Kong is one of the international financial centres, and the investor base is relatively international, including many high-quality long-term investors who are concerned about the future development of enterprises. Listing in Hong Kong can better optimize the shareholder background of listed companies and contribute to the long-term development of enterprises.
Second, the Hong Kong Listing Rules have been continuously optimized and adjusted, and in terms of listing thresholds, more innovations have been carried out in recent years that are conducive to listed enterprises, which can better provide capital market support for Chinese-funded enterprises that hope to accelerate the process of internationalization.
Third, Hong Kong already has clear regulatory policies and many precedents for listing in second listing places, which facilitates Chinese stocks to choose Hong Kong as a second listing place.
Wang Jing also said that the path of internationalization of investment banks is basically similar, objectively focusing on the accumulation of international practical experience, handling the relationship between the strengthening of the mainland's market position and the development of internationalization, and weighing the allocation of resources between the two is the key factor for the success of the future internationalization path of Chinese securities companies.
Wang Jing said: "Chinese understand the Chinese better, Chinese investment banks understand Chinese enterprises better, and Chinese investment banks sincerely escort Chinese enterprises." ”
(Editor: Xia Xin Proofreader: Yan Jingning)