This photo shows posters of Chinese electric vehicle battery maker Contemporary Amperex Technology (CATL) at the Hong Kong stock exchange in south China's Hong Kong, May 20, 2025. (Xinhua/Chen Duo)
BEIJING, Aug. 7 (Xinhua) -- After a circular of the Stock Exchange of Hong Kong (SEHK) signaling lower threshold for "A+H" issuers took effect from Monday, more and more A-share companies are expected to opt for listing on the Hong Kong market.
On August 1, SEHK released a circular saying that under the new tiered structure for initial public float thresholds, the lowest initial public float threshold for "A+H" issuers has been adjusted to 10 percent.
This change was part of the conclusions to SEHK's previous consultation paper that invited proposals to optimize initial public offering (IPO) price discovery and open market requirements to provide issuers with greater flexibility.
-- "A+H" listing on the rise
By August 3, 10 A-share companies have gone public on SEHK this year, with industry leaders in sci-tech, medical and consumption sectors such as CATL (03750.HK), Jiangsu Hengrui Pharmaceuticals (01276.HK) and Foshan Haitian Flavouring and Food (03288.HK) also among the team.
Ying Weiping, board chairman of Trans International Finance Holding Group attributed the relatively frequent "A+H" listings to the currently loose, flexible policy environment and better quality of listed companies.
In his opinion, many of the A-share companies sought H-share market listing in an attempt to pillar their "going global" drives and shore up their influences on the international market.
On August 2, Nexchip Semiconductor (688249.SH) announced that to promote its overseas business, it was mulling H-share offerings to optimize capital structure and expand financing channels.
Prior to Nexchip, another two A-share companies also issued similar announcements on planned listings on the Hong Kong stock market.
Generally, A-share companies that intend to list on the H-share market are mostly sub-sector pacesetters and boast relatively high scarcity, likely to attract continuously global capital influx, noted He Zhaofeng, a managing partner of EY Greater China.
In the future, He believed that more large companies and industry chain champions will go public on the H-share market and the proportions of IPOs of new consumption and hard-tech businesses are likely to rise further.
-- Completer and better coordination between regulators
Behind the "A+H" listing tide lies ongoing optimization of the coordination mechanisms between related regulators.
Since the start of this year, "A+H" listing has remained active on the primary stock market in Hong Kong as listing there stood for a convenient channel for companies to raise foreign currencies, said Wang Yajun, co-lead of equity financing at Goldman Sachs Asia ex-Japan.
Moreover, regulatory review over record filing for H-share market listing by A-share companies also accelerated and SEHK promised to complete related review over A-share firms with 10-plus billion Hong Kong dollars of market capitalization (market cap) within 30 days, noted Wang.
For specialist tech and bio-tech companies, application for listing via the technology enterprises channel (TECH) launched by the local securities regulator of Hong Kong and SEHK offered more convenience, stressed Ying.
The TECH allows related businesses to submit their H-share market listing applications confidentially, which significantly improves the review efficiency and gives rise to the "A+H" listing fervor, added Ying.
Experts also underscored boosts from the optimized policy environment.
In April 2024, Chinese securities regulator announced five measures to deepen cooperation between the mainland-Hong Kong capital markets and industry-leading companies in the Chinese mainland are supported explicitly to list on Hong Kong market.
-- Upsized policy boosts
In the future, Chinese financial regulators are expected to further crank up their support for overseas listing of A-share companies, according to market players.
Currently, more and more large A-share companies are eyeing H-share market listing, said an industry expert, adding that previous proportion threshold requirements of SEHK for "A+H" issuers lacked flexibility.
After the rules adjustment, companies with relatively small market cap can choose the 10 percent criterion for initial public float threshold and if market cap of related offerings reaches three billion Hong Kong dollars, they can also complete "A+H" offerings via this standard, added the expert.
These changes not only lowered the threshold for "A+H" listing, but also made the IPO mechanisms on Hong Kong stock market more flexible, held the expert.
Recently, Chinese central bank and State Administration of Foreign Exchange jointly released an opinion-inviting circular to further optimize management over funds raised through overseas listing of domestic firms.
The opinion-inviting version provides convenience for every step in funds management of companies' overseas listing and is expected to further bolster the "A+H" listing, said Yang Delong, chief economist with First Seafront Fund.
For "A+H" issuers, they are embracing bigger leeway in related funds repatriating, use and management and can thus better plan the use of funds after H-share market listing, Yang noted.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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