Hong Kong stocks "embrace" the new economy and attract Chinese concept stocks to accelerate their "return"
Xinhua News Agency, Shanghai, April 10 -
Title: Hong Kong stocks "hug" to attract new economic concept stocks accelerated "return"
Xinhua News Agency reporter Pan Qing
Ctrip Group recently officially launched the Hong Kong stock IPO subscription, and plans to list on the main board of the Hong Kong Stock Exchange on the 19th. By then, it will become the first online travel company to be listed in the United States and Hong Kong at the same time.
Since 2019, 13 U.S.-listed companies including Alibaba, NetEase, Baidu, and Bilibili have successively achieved secondary listings in Hong Kong.
This shows that the Hong Kong stock market is actively "embrace" the new economy, and is attracting China concept stocks to accelerate the "return".
On April 30, 2018, the Hong Kong Stock Exchange's listing system reform took place.
Relying on this major change, the Hong Kong stock market has shown a positive attitude to "embrace" the new economy, and it has also provided a new financing platform for overseas listing of Chinese concept stocks.
Statistics show that in the past two years, 13 Chinese concept stocks have been listed in Hong Kong for the second time while retaining the listing status of US stocks, with a total fundraising of more than 280 billion Hong Kong dollars.
The return of Chinese concept stocks has become an important driving factor for the continued activity of IPOs in the Hong Kong market.
According to a report recently released by professional organization Deloitte, the amount of IPO financing in Hong Kong stocks in the first quarter of this year reached 132.8 billion Hong Kong dollars, a record high in the same period.
The top three Kuaishou Technology, Baidu Group, and Bilibili “contributed” nearly 70% of the total financing, of which the latter two were both secondary listings.
From the perspective of institutions here, China's concept stocks "hold hands" in the Hong Kong market are forming a win-win situation.
CICC believes that China's concept stocks are listed in Hong Kong for the second time and are included in the benchmark index, which can increase the liquidity of its own stocks by increasing passive capital inflows and absorbing active capital investment, and gain room for valuation improvement.
The return of Chinese concept stocks has also changed the situation that the market value of traditional industries in the Hong Kong market is too high.
Statistics show that among the 13 Chinese concept stocks that went to Hong Kong for secondary listing, new economic leaders such as consumption, information technology, and medical care accounted for more than 90%.
Especially with the joining of Alibaba, Netease, Baidu, JD and other companies, the "new economic gathering place" in the Hong Kong market has begun to take shape.
Institutions generally believe that some Chinese concept stocks choose to go to Hong Kong for secondary listing, which will help avoid the pressure of increasing uncertainty in the overseas market environment.
According to the rules of the Hong Kong Stock Exchange, the secondary listing of Chinese concept stocks in Hong Kong must meet relevant conditions, including a market value of more than 40 billion Hong Kong dollars, or a market value of more than 10 billion Hong Kong dollars and current income of more than 1 billion Hong Kong dollars.
The CICC research report shows that excluding companies that have been listed in Hong Kong, there are currently 19 companies that fully meet the above conditions, corresponding to a total market value of approximately US$300.3 billion (approximately HK$2.33 trillion). In addition, there are many potential targets.
The increasing attractiveness of the Hong Kong stock market can be seen from the changes in the southbound funds of the Shanghai-Shenzhen-Hong Kong Stock Connect.
In 2020, the net inflow of Southbound Stock Connect funds will be 672.1 billion Hong Kong dollars, setting a new annual high since the opening.
Since 2021, as of April 8, there are 43 trading days of Southbound Trading within 55 trading days for net capital inflows, with a total net inflow of 382.5 billion Hong Kong dollars (nearly 320 billion yuan), which is 3.35 times the net inflow of northbound capital in the same period.
Institutions predict that mainland investors prefer the new economy sector and have high investment demand for technology and consumer leaders.
If the concept stocks in the secondary listing are included in the subject of Southbound Stock Connect, their trading activity may increase significantly.
Tao Yifei, QDII fund manager of Haifutong Fund Management Co., Ltd., said that the Hong Kong stock market is expected to become the "highland" for China's new economy companies in the future.