Photo: NetEase is listed on the Hong Kong Stock Exchange. (Xinhua/Wang Shen)
HONG KONG, Sept. 3 (Xinhua) -- Following the listing of two U.S.-listed Chinese companies Netease and JD.com, the third U.S.-listed Chinese companies Yum China will enter the Hong Kong stock market on September 10.
As of Thursday, the share prices of Alibaba, NetEase, and JD.com, which were turning to Hong Kong for a secondary listing, have all increased substantially compared to their Hong Kong offering prices, which reflects the high popularity of U.S.-listed Chinese companies in Hong Kong.
--- More U.S.-listed Chinese companies turn to Hong Kong for secondary listing
Affected by the outbreak of COVID-19, Hong Kong Stock Exchange closed the financial trading hall in March, cancelled the on-site listing ceremony, and used online video to "cloud knock the gong" for listing.
However, the epidemic has not prevented Chinese concept stocks from seeking secondary listing in Hong Kong. The market predicts U.S.-listed Chinese companies may accelerate the pace of getting secondary listing in Hong Kong, which is expected to bring new vitality to the Hong Kong capital market.
Photo: An advertisement for JD.com was listed in central Hong Kong. (Xinhua/Wang Shen)
In the second half of 2020, the market frequently reported that U.S.-listed Chinese companies will be listed in Hong Kong. In August, it is reported that New Oriental, Baozun E-commerce, Best Group, Iqiyi and Vipshop will return to Hong Kong to go public in a few months.
Deloitte predicts that in the second half of the year, 6 to 9 China concept stocks will go to Hong Kong for secondary listing. The scale of fund-raising of this batch of U.S.-listed Chinese companies may be smaller than that of JD.com and NetEase.
Listed companies and investors are expected to experience the grand listing of Chinese concept stocks on the Hong Kong Stock Exchange in the second half of the year if the epidemic is under control.
--- Hong Kong adopts multiple measures to boost the performance of Chinese concept stocks
As of the end of August, Alibaba, NetEase, and JD.com's issue prices in Hong Kong have increased by 64.2 percent, 27.7 percent and 36.5 percent respectively. The performance of their share prices has attracted more investors to pay attention to the secondary listing of Chinese concept stocks in Hong Kong.
On August 15, two Hang Seng Technology Index constituent stocks Alibaba and Xiaomi Group were included in the Hang Seng Index (HSI) constituent stocks. The Hang Seng Index announced that the results of the quarterly review included Alibaba, Xiaomi and WuXi Biologics, with weight of 5 percent, 2.59 percent and 1.75 percent respectively. Market participants believe that in view of the high-tech nature of the Chinese concept stocks and the value of the company itself, many Chinese concept stocks will be included in the HSI constituent stocks in the future.
Photo: Hong Kong Hang Seng Technology Index was officially launched on July 27, 2020. (Xinhua/Wang Shen)
At the same time, Hong Kong Stock Exchange launched related derivatives on the first day of Chinese concept stocks' listing in Hong Kong, which improved the trading activity of related products. According to the trading volume of Chinese concept stocks in Hong Kong and its own market value, it will be sooner or later that mainland investors will be able to invest in Chinese concept stocks listed in Hong Kong.
--- The listing of Chinese concept stocks is good for the Hong Kong stock market
In 2019, Hong Kong remained the global IPO fundraising champion. Hong Kong Stock Exchange won the global IPO fundraising champion for seven times in the past 11 years.
In November 2019, Alibaba went public for the second time in Hong Kong, raising more than 100 billion Hong Kong dollars, which contributed a lot to the Hong Kong Stock Exchange's IPO fundraising champion. In 2020, NetEase raised more than 20 billion Hong Kong dollars via getting listed in Hong Kong, and JD.com raised nearly 30 billion Hong Kong dollars .
Thanks to it, Hong Kong Stock Exchange handed over a beautiful performance report.
Hong Kong Stock Exchange announced its results for the first half of 2020 in August. Its revenues were 8.782 billion Hong Kong dollars, marking a year-on-year increase of 2 percent and hitting a new semi-annual high. Its net profit reached 5.233 billion Hong Kong dollars, registering a year-on-year increase of 1 percent and also hitting a semi-annual high. Hong Kong Stock Exchange stock price has risen by more than 50 percent over the past year.
Photo: An electronic screen shows the listing and trading of NetEase on the Hong Kong Stock Exchange. (Xinhua/Wang Shen)
Charles Li, chief executive of the Hong Kong Stock Exchange, said that the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect and the listing of new economy companies in Hong Kong have brought huge changes to the Hong Kong stock market and greatly increased market trading volume. The changes are huge and difficult to reverse, adding that he believes that the market's daily average transaction has reached a healthy level structurally.
"These changes have brought huge new vitality to the Hong Kong market. Not only the number but also the issuance volume have increased substantially," said Li.
"Large-scale listings are only a matter of time, not whether or not," said Li, when talking about the return of Chinese concept stocks in the future.
He firmly believes that the IPO market continues to attract a large number of companies preparing to issue new shares in Hong Kong, Hong Kong Stock Exchange will continue to ride the wind and waves, and connect China and the world. (Contributed by Li Binbin, edited by Zhang Yuan with Xinhua Silk Road, zhangyuan11@xinhua.org)
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