(Economic Observation) What signals does JD and other Chinese stocks seek to return?
China News Agency, Beijing, June 8 (Reporter Chen Kangliang) China's e-commerce giant JD.com announced on the 8th that it would sell shares in Hong Kong on the same day. JD.com’s move is an important step for its “second listing” in Hong Kong. Analysts here believe that the return of Hong Kong stocks to star stocks such as JD.com is not only in response to the "difficulties" in US regulation, but also reflects the positive results of previous reforms of Hong Kong stocks.
On the 8th, the Jingdong Group, which has been listed in the United States, announced that it officially launched the public offering of shares on the morning of the same day, and the public sale price did not exceed HK$236 per share, and it will be officially listed for trading on June 18.
This time, JD.com's "second listing" in Hong Kong has 133 million shares issued globally. Based on the public development selling price not exceeding HK$236 per share, after deducting the expected underwriting fees and offering expenses payable, assuming that the over-allotment option has not been exercised, the net proceeds from the global offering will be approximately HK$30.988 billion; assuming the over-allotment option When fully exercised, it is approximately HK$35.649 billion. JD.com said that it intends to use the net proceeds from the global offering to invest in key technological innovations based on the supply chain to further enhance the customer experience and improve operational efficiency.
It is worth noting that the Chinese stocks that recently returned to Hong Kong stocks are not JD.com. Netease, a well-known Chinese game company, will have a "second listing" in Hong Kong on June 11 before Jingdong. NetEase has completed a public sale a few days ago and raised more than 20 billion Hong Kong dollars.
In addition, Baidu is also considering delisting from the United States. Baidu founder Li Yanhong said recently that he is very concerned about the continued tightening of the control of China's stock companies. Baidu is also discussing what can be done, including secondary listings in Hong Kong and other places.
Great Wall Securities analyst Liu Peng said that the star stocks represented by JD.com have recently returned to Hong Kong stocks, which is not only conducive to expanding the financing channels and increasing the fund raising scale, but also helping to further reduce the The risks faced by potential stocks in the US stock market.
The risks mentioned by Liu Peng include a new round of American-style supervision that is "difficult". The US Senate passed the Accountability Act for Foreign Companies on May 20, requiring foreign companies listed in the United States to strengthen compliance with the country’s regulatory standards. The senator who proposed this bill made it clear that the bill mainly targets Chinese companies listed in the United States.
It is reported that the bill requires foreign issuers to fail to meet the requirements of the PCAOB's inspection of accounting firms for three consecutive years, prohibiting their securities from trading in the United States.
In addition, the bill also requires listed companies to disclose their relationship with the host government. If a listed company employs an accounting company that is not regulated by the United States, which prevents the US review agency from auditing its financial reports, the bill requires the company to prove that it is not owned or controlled by the host government.
In response, the China Securities Regulatory Commission quickly responded. The head of the relevant department of the China Securities Regulatory Commission said that from the perspective of the bill and the comments of the relevant people in the US Congress, some provisions of the bill directly target China, rather than professional considerations based on securities regulation, and firmly oppose this politicization of securities regulation. .
Dong Dengxin, director of the Institute of Financial Securities at Wuhan University of Science and Technology, believes that the above-mentioned bill is undoubtedly a suppression and hostility to Chinese stocks, which may push more Chinese stocks to delist in the United States and return to the Hong Kong or A-share market.
Some analysts believe that the return of the stocks in this round is also related to the reforms of Hong Kong stocks and A shares in recent years. Wang Hanfeng, chief strategy analyst of CICC, believes that a series of reforms in the Hong Kong market and the A-share market in recent years have increased market inclusiveness and created conditions for the return of China's stock market. The reason why a large number of Chinese technology companies have not been able to list on the A-share market before is mainly due to the issuance and listing review system, the disallowing of different rights for the same shares, the requirement for higher profits, and the fact that some companies are behind US dollar fund shareholders. Similarly, the Hong Kong stock market has not previously demonstrated the flexibility of overseas markets, leading heavyweight companies like Alibaba to choose to list in the United States.
Wang Hanfeng further pointed out that since 2014, the mainland and Hong Kong have accelerated their institutional reforms, providing conditions and an environment for the return of Chinese stocks. The Hong Kong market adjusts its listing mechanism to enhance market inclusiveness. The A-share market will launch the Science and Technology Board in 2019, allowing companies with different rights and red chips of the same stock to be listed, and experimenting with registration-based issuance to lower the listing threshold and standardize the listing process.
Dong Dengxin pointed out that the return of JD.com and NetEase represents that the majority of the stock market returns in this round are large-scale leading companies with high market value, and their return is expected to play a strong demonstration role. (Finish)