A Lot Of Two Listings Will Be Staged.

After Alibaba, Jingdong and NetEase return to Hong Kong stocks, a long list of China's stock market lists, such as many spells, Ctrip and good future, appear in the recommended reports of major brokerages. Among them, there is no lack of speculation to attract capital participation.

"We are mainly sorting out the list according to the second listing rules of the HKEx. Technology companies and the US market will be listed for over 2 years, with a market value exceeding HK $40 billion or HK $10 billion, and revenues exceeding HK $1 billion, compliance. In June 8th, in response to the above issues, Fu Road Securities stakeholders in response to the twenty-first Century economic report reporter, pointed out that the company followed the standards.

However, one obvious problem is that it has not been more than two years so far. The official of the company also clarified the news of going back to Hong Kong and said there was no plan.

Even so, it can not stop the enthusiasm of capital. Recently, another Internet giant NetEase has just concluded its public subscription. The public offering has been oversubscribed more than 300 times, and the frozen amount is about HK $190 billion, the second largest frozen new stock this year. The size of Jingdong's issuance is also not to be underestimated.

In the industry's view, the return of China's stock market has nothing to do with Nasdaq's tightening of listing rules. Especially after Rui Xing financial fraud incident was exposed, it also brought a test to the regulatory authorities. In the future, will the two listing of China's stock market become normal?

Ye Mengyi, chairman of Asian business unit of Ortoli Rosenstadt LLP, believes that the privatization and the two listing of Chinese companies are not the result of changes in the US capital market, but the evolution of global financial markets. "The US government has never said that Chinese companies should not be listed. They want the same rules. This needs to be clear. "

In his view, Chinese companies have many opportunities and choices at this point in time. But they should choose their own market according to their own strength rather than simply considering policy factors.

A lot of people have clarified the news of Hong Kong's listing to our reporter, saying there is no listing plan. Vision China

Fight for more?

Prior to this, the HKSAR's new deal proposed four conditions for China's stock market. It was listed on the US stock market before December 15, 2017. Two, it belongs to the new economic consumption, technology, medicine and other fields; three, the market value is above 40 billion Hong Kong dollars, or the market value is more than 10 billion Hong Kong dollars, and the annual profit in 2018 is more than 1 billion Hong Kong dollars.

According to Wan de information, 234 Chinese stock companies were sorted out, and there were 19 stocks in the initial alignment with the above conditions. The total market capitalization was about 340 billion dollars, including: Jingdong, Baidu, NetEase, good future, New Oriental, Ctrip, Zhong Tong express, yum China, Hua Ju, automobile home, unfamiliar street, no worries, happy gathering times, Tai Bang biology, etc.

On the premise that NetEase and Jingdong decided to return to Hong Kong for the two time, there was news that many of them had been submitted to the HKEx for the two time to go to Hong Kong. It is expected that by the end of June, they will be formally listed in the first half of 7. "The company has never discussed this plan with any intermediaries, nor has it had any contact with any exchange on the topic of" two listing ". The company has plenty of cash reserves and no listing plan. A lot of related people told the economic news reporters in twenty-first Century.

As a matter of fact, it was less than two years since July 27, 2018 when it was founded in 34 months and it is still in a loss. More than a few days ago, the first quarter 2020 earnings report showed that its revenue was 6 billion 541 million yuan, an increase of 44% over the same period, a net loss of 3 billion 170 million yuan, compared with a net loss of 1 billion 379 million yuan in the same period last year. As for the problem of loss, it is pointed out that the healthy cash flow of the company has generated a positive cash flow. Up to now, the growth of capital reserves and revenue is enough to make the "billions of subsidies" last for many years, so there is no listing plan for the two time.

However, its market value has gone all the way, exceeding that of NetEase, Baidu and other Internet giants. By the end of June 8th, the market value was $83 billion 475 million. From the time of market and profitability, at least, at present, too many spells do not meet the requirements of Hong Kong listing.

"Institutions are more rational and will not invest in liquidity. Moreover, whether the US group reviews, Jingdong or spelling a lot, the valuation has been relatively high. Even if we go back to the Hong Kong stock market, we will have a greater boost to market value unless we enter Hong Kong stocks and have a bigger change in the structure of investor groups. A state-owned fund overseas investment officer in an interview with the twenty-first Century economic report reporter said that unless there are clear benchmarking companies on the A shares, which makes the outside world feel undervalued, the most typical case is NetEase.

It is worth noting that the performance of brokerages is much more positive. In the public information of Fu Road Securities, many companies have entered the list of "two returns". Are they trying to attract more capital to participate in the investment? In this regard, the rich insiders did not give an explanation.

U.S. stock market rebound

In a related research report, CICC has said that if the above companies gradually return to Hong Kong stocks in the next one to two years and the average issuance of new shares is about 10%, then the potential financing amount will be around us $34 billion, which will help consolidate Hongkong's leading position in the global equity financing market. For the entire Hongkong market, it can be said to be harmless. Is the US stock market still attractive?

This year March, the US stock market is almost closed to all companies. It was not until March 27th when the United States passed the $2 trillion stimulus bill that the market began to pick up. However, from the data point of view, the US stock market still has a huge liquidity advantage. From the beginning of 2020 to the beginning of the year, there were 36 companies in the first quarter of the US stock market IPO, raising funds of US $13 billion, compared with 2017, 2018 and 2019. In the first quarter of 2020, the IPO fund-raising performance was strong. Nearly 80% of US stock IPO is less than or equal to 250 million US dollars.

Overall, this performance is not bad. As the US stock market rebounded, the total issuance amount of the US stock market in May (the new listing, the two issue and the bulk transaction) reached US $65 billion 500 million, the highest monthly issuance record in history. However, the US election may bring more uncertainty to US stocks, and volatility will also rise.

In May 21st, the US Senate passed the Holding Foreign Companies Accountable Act, which stipulates that any foreign company that fails to comply with the audit requirements of the United States listed company accounting supervision committee (PCAOB) for three consecutive years will prohibit the listing of the company's securities on the US stock exchange. The bill still needs to be approved by the house of Representatives and signed by the president.

Recently, in the live broadcast of multimedia organizations in Wall Street, Chen Hua, partner of UHY LLP, an excellent accounting firm, said that the new rules would bring uncertainty to the survival of China's stock market, but it does not mean that the new regulation is aimed at Chinese listed companies. If Chinese enterprises reject PCAOB's censorship, NASDAQ has the right to reject the IPO listing application, and plans to transfer to the United States listed companies and enterprises and transfer their cards will also face changes.

Ye Mengyi also believes that this new rule is not aimed at Chinese enterprises, but it is undeniable that Chinese enterprises will indeed be affected. However, this effect is not necessarily bad. He said that in the past, Chinese companies who wanted to list in the US need to guess the Nasdaq's "hidden rules". Instead, the new rules provided a clear and objective standard for listed / listed companies.

In the view of investment bankers, the two listing of shares in Hong Kong shares does not mean that the company is facing the risk of delisting in the US. At the same time, the listing of HKEx and US stocks can achieve a 24 hour flow to meet the needs of enterprises for capital and liquidity. Many Chinese companies are listed as the norm, and the IPO market will gradually pick up in the second half of the year.

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