By Li Tingting
Source: capital detective (ID: deep)_ insights）
After Netease and Jingdong went to the Hong Kong stock exchange for listing in June, the wave of secondary listing of China capital stocks in Hong Kong continued to surge, and some boots were settled recently. On August 28, yum China announced that it had submitted its application for secondary listing in Hong Kong. In addition, the outside world on Baidu, B station, iqiyi and other stars in the process of secondary listing more speculation, but there has been no accurate news.
For reasons such as confidentiality of information, most companies are usually limited to market rumors about secondary listings
Which enterprises will be listed twice? When is the second listing? This has become the most concerned market, but it is difficult to find the exact answer.
It should be pointed out that, to a certain extent, whether or not to go back to Hong Kong for secondary listing depends on the subjective will of the enterprise. However, whether the enterprise is qualified for secondary listing is an objective problem that can be solved quantitatively.
Therefore, from the Hong Kong Stock Exchange rules on secondary listing, combined with the current market value, performance, can lock in the scope of enterprises eligible for secondary listing
Detailed reading of the rules: it has been listed for two complete accounting years, and its market value and revenue have reached a certain scale
With the return of China capital stock exchange, the Hong Kong Stock Exchange wants to expand the market capital, optimize the structure and enhance the activity. In terms of actual effect, after the return of Alibaba, Netease and Jingdong, the Hong Kong Stock Exchange delivered its most brilliant semi annual report in August this year, with daily turnover and shareholders' profits reaching new highs in the second half of this year. On the one hand, the Hong Kong Stock Exchange's breakthrough is due to the active secondary market under the background of the times, on the other hand, the secondary listing of the three giant enterprises is indispensable.
In the process of carrying out the reform, the Hong Kong Stock Exchange naturally makes its own calculations. What it needs is a relatively large volume of high-quality Chinese capital stocks which are popular with investors. Therefore, from the three dimensions of enterprise type, market value and revenue, the Hong Kong Stock Exchange has set a certain threshold for the secondary listing of enterprises
Eligible issuer must be eligible
Qualified issuers must have been listed on a qualified exchange and have maintained good compliance records for at least two complete accounting years;
It has a market value of at least HK $40 billion at the time of listing, or at least HK $10 billion at the time of listing, and at least HK $1 billion in the latest audited accounting year.
Of the three rules, the
Based on the current market perception, it can be argued that,
In addition, several other rules proposed by the Hong Kong stock exchange are precise quantitative criteria, which are the most important qualification for determining whether China capital shares are eligible for listing in Hong Kong.
There are two key words in the second rule, one is
A qualified exchange refers to the New York Stock Exchange, the Nasdaq stock market or the main market of the London Stock Exchange. Almost all Chinese stocks meet this requirement.
The third rule is based entirely on the market value and revenue scale of enterprises. Only enterprises with the scale up to the standard can have the key to open up the Hong Kong stock market.
Baidu and New Oriental meet the requirements, iqiyi and station B are not expected to be listed again this year
According to the above three rules, we can roughly sort out the list of qualified secondary listing.
Of the existing stocks in the U.S. market, the market value is more than HK $40 billion ($5.16 billion), attributable to
Some of these enterprises have clearly sent their intention of going to Hong Kong for secondary listing.
For example, at the third session of the 13th CPPCC National Committee in May, Baidu Chairman Li Yanhong said in accepting the video link,
Ctrip, another well-known company, is also one of the enterprises in line with the secondary listing rules of the Hong Kong stock exchange. However, Ctrip does not seem to want to do so. According to foreign media reports, it is planning to delist from Nasdaq to prepare for re listing in Hong Kong.
According to the data released by snowball, the six most expected companies to return to Hong Kong in the second half of 2020 are BiliBili Bili, pinduoduo, tal, New Oriental, Weilai and Tencent music.
These enterprises have more or less come out of the news of secondary listing in Hong Kong. For example, in July this year, according to Reuters, two people familiar with the matter disclosed that bilibilibili was considering a secondary listing in Hong Kong and could sell up to 10% of its shares.
But the good news will not come too soon, in this list, beep, pinduoduo, Wei Lai, Tencent music four companies actually do not have the conditions to return to Hong Kong in the year. All four listed in 2018 to meet the HKEx
Tencent Music has recently adopted
In addition, the list of most expected investors, New Oriental, good future two education giants to return to Hong Kong listing rumors, one said
Another noteworthy enterprise is iqiyi. Recently, rumors about its secondary listing in Hong Kong have been rampant. But in fact, the earliest time iqiyi was able to submit its forms to the HKEx was in early 2021. By analogy, the earliest time for the ideal car to be listed in 2019 and just listed in July this year is in early 2022 and early 2023, respectively.
In addition to enterprises with a market value of more than HK $40 billion, China capital stocks with a market value of more than HK $10 billion (about US $1.29 billion) and revenue of more than HK $1 billion (about US $129 million) in the past year also meet the requirements of the Hong Kong stock exchange for the size of enterprises to be listed in Hong Kong for secondary listing.
In fact, the threshold set by the Hong Kong stock exchange is not high. "Capital detective" has found that in the US stock market, there are about 19 Enterprises with a market value of more than HK $10 billion and innovative industries. With the exception of two biomedical enterprises, the annual revenue of other enterprises in 2019 is higher than HK $1 billion.
Among these enterprises, the key factor limiting their secondary listing in Hong Kong is still the time of listing. For example, futu, Netease Youdao, 360 digital technology, calf electric, eggshell and other enterprises listed in 2018 and 2019 are not qualified for secondary listing in Hong Kong at this stage.
Among the enterprises that meet the requirements, Baishi group, Lexin, baozun e-commerce, etc. have recently spread relevant news. Among them, baozun e-commerce, an e-commerce agent, may be the earliest to ring the bell in Hong Kong. According to Tencent securities, baozun e-commerce may go to Hong Kong for a second listing in September, and has selected a cooperative bank. At present, it is cooperating with Citigroup, Zhaoyin international and Credit Suisse Group on listing transactions, with a financing amount of US $500 million.
Of all the above-mentioned enterprises, excluding those that have received privatization offers, listed in Hong Kong stock market and submitted applications, there are about 22 enterprises that are qualified to go to Hong Kong for secondary listing this year. In addition, many of the widely concerned Chinese capital stock companies are not qualified for secondary listing due to their listing years. However, it can be predicted that after these enterprises reach the standard, the wave of secondary listing of China capital stock will continue in the next year.
The future of IPO of new economy company
Among the above listed companies that are in line with the secondary listing rules of the Hong Kong stock exchange, some enterprises are going against the trend of secondary listing, showing a tendency of privatization. For example, Sina announced in July that it had received the preliminary non binding privatization proposal. In the same month, Sogou announced that it had received Tencent's privatization offer. According to market news, Ctrip also has the possibility of delisting from US stocks.
The second listing and privatization are the two paths for China capital stock to return to the capital market of home country. Based on the reform of A-share registration system and the reform of Hong Kong stock ownership structure, the capital market of home country is increasingly attractive to China capital stock, and the global capital market is in the process of structural change.
Therefore, to a certain extent, the purpose and significance of the secondary listing or privatization of China capital stock are the same. But on the practical level, these two ways are still very different.
Secondary listing is an expansion of the existing financing channels, and the operation is more concise and fast. Companies applying for secondary listing can directly adopt American accounting standards to prepare financial statements, without the need to re prepare financial statements in accordance with Hong Kong / international financial reporting standards, which saves a lot of energy for enterprises. Moreover, the second listed enterprises can apply for exemption from disclosing some financial information.
From the cases of Alibaba, Netease and Jingdong, the whole operation time of secondary listing of China capital stock in Hong Kong is relatively short. In other words, as long as the enterprises meet the requirements of the HKEx, it is not difficult to operate the secondary listing in Hong Kong and the time cycle is not long.
The first delisting and then returning to China for re listing requires enterprises to complete privatization first, and then to comply with the general listing rules and re apply for listing according to the prescribed process. Among them, the delisting cost of privatization is high, and the financial statements need to be re prepared according to the requirements of the exchange when re listing. In terms of application process and information disclosure, more specific requirements need to be met. Therefore, there is great uncertainty in time.
Although it is more difficult to operate, privatization is a way for some companies that are in cold weather in US stocks to return to the capital market of their home countries. For the secondary listed companies, the Hong Kong stock market is only a supplement, and the US stock market is the main place of stock circulation, which plays a leading role in the determination of enterprise value. For many Chinese capital stocks which are not favored by American stock investors and have been undervalued for a long time, the significance of secondary listing is limited.
On the other hand, after the registration system was opened on the science and technology innovation board and the growth enterprise market, new economy enterprises that were once blocked by the A-share market due to profit problems and ownership structure problems also have the opportunity to land on a shares. The overvalued value of A-share market is full of temptation for China capital stock market, but to return to A-share listing, China capital stock must go through the path of privatization delisting and then re listing.
No matter how the stock market chooses, a clear direction is
This change in wind direction is reflected in the unicorn's choice. Super Unicorn ant group, which has a daily income of 400 million yuan, submitted a prospectus to the Shanghai Stock Exchange and the Hong Kong Stock Exchange on August 25, and chose to list on the Hong Kong Stock Exchange and the science and technology innovation board at the same time.
Ant group is the first unicorn to choose to be listed on both Hong Kong and a shares at the same time. However, after this prelude, there will be many followers. The relationship between Chinese enterprises and the capital market of home country is deepening day by day. The direction of the tide has changed.